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E614 Volume I Public Disclosure Authorized

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Public Disclosure Authorized DRAFT ENVIRONMENTAL ASSESSMENT REPORT

For INTEGRATED PASTORAL

DEVELOPMENT

Public Disclosure Authorized FILEC PYU3 Public Disclosure Authorized

Table of Contents

I Introduction and Project Background ...... 1 . 1. 1.1 Purpose of the Report 1 2. 1.2 Brief Introduction to the EA Report 1 1.2.1 Importance of the Project...... 1 1.2.2 Structure of the Report...... 2 3. 1.3 Bases of Assessment 2 1.3.1 Laws and Regulations...... 2 1.3.2 Technical Documents...... 3 1.3.3 Main Design Documents...... 3 4. 1.4 Principles of Environmental Assessment 4 5. 1.5 Relationship to Feasibility Study 5 6. 1.6 EA Teamn 6 7. 1.7 Assessment Scope and Periods Covered 6 1.7.1 Assessment Scope ...... 6 1.7.2 Periods Covered...... 7 8. 1.8 Assessment Factors 7 9. 1.9 Assessment Focus and Categorization 8 10. 1.10 Assessment Criteria 11 11. 1.11 Assessment Focus and Categorization 11 12. 1.12 Assessment Procedure 12 2 Policy, Legislation & Administration Framework ...... 13 13. 2.1 Organizations & Administrative Framework 13 14. 2.2 National Policy & Strategy for Environmental Protection 13 15. 2.3 WB Requirements 14 3 Project Description ...... 16 16. 3.1 Project Goals 20 17. 3.2 Project Objectives 20 18. 3.3 Project Components 20 3.3.1 GrasslandManagement Component...... 21 3.3.2 Livestock ProductionImprovement Component...... 21 3.3.3 Market Systems Development Component ...... 22 3.3.4 Applied Research, Training, and Extension Component...... 23 19. 3.4 Indicators of Project Success23 20. 3.5 Project Area 24 3.5.1 Gansu Province...... 24 3.5.2 XUAR ...... 24 21. 3.6 Project Implementation Schedule 25 22. 3.7 Project Investment 26 4 Description of Existing Environment .27 23. 4.1 Physical Environment, Gansu 27 4.1.1 Topography...... 27 4.1.2 Soil ...... 27 4.1.3 Climate...... 28 4.1.4 Hydrology ...... 28 4.1.5 Surface Water Quality...... 33 4.1.6 Groundwater Quality...... 34 4.1.7 Atmospheric Environment...... 35 24. 4.2 Ecological Environment, Gansu 35 4.2.1 Flora...... 35 4.2.2 Fauna...... 35 4.2.3 .Nature reserves ...... 36 4.2. 4 Soil Erosion and Water and Soil Conservation...... 37 25. 4.3 Socio-cultural Environrnent, Gansu 37 4.3.1 Population.37 4.3.2 CulturalBackground .38 4.3.3 Public Health.39 4.3.4 Cultural Heritage.39 4.3.5 Scenic Spots and Tourism.39 4.3.6 Infrastructure.40 4.3.7 Land Tenure and Land Ownership.40 4.3.8 Land Use and Farming/herdingPractices .40 4.3.9 Other Employment/Manufacturing Opportunities.46 4.3.10 Socio-economic Development Plan.46 26. 4.4 Physical Environrent, XUAR 46 4.4.1 Topography...... 46 4.4.2 Soils.47 4.4.3 Climate.S0 4.4.4 Hydrology.50 4.4.5 Surface Water Quality .56 4.4.6 GroundwaterQuality .57 4.4.7 Air Quality.59 27. 4.5 Ecological Environment, XUAR 59 4.5.1 Flora...... 59 4.5.2 Fauna...... 61 4.5.3 Nature Reserves...... 61 4.5.4 Soil Erosion and Water and Soil Conservation...... 63 28. 4.6 Social and Cultural Environrent, XUAR 64 4.6.1 Population.64 4.6.2 CulturalBackground .65 4.6.3 Public Health.65 4.6.4 CulturalHeritage .66 4.6.5 Scenic Spots and Tourism.66 4.6.6 Infrastructure.66 4.6.7 Land Tenure and Land Ownership.66 4.6.8 Land Use and Farming/herdingPractices .66 4.6.9 Other Employment/ManufacturingOpportunities .70 4.6.10 Employment Opportunities.74 4.6.11 Socio-economic Development Plan.74 5 Public Participation .76 29. 5.1 Consultation Method and Subject 76 5.1.1 Consultation with Family or Individual.76 5.1.2 Inter-agency and NGO Consultation.76 30. 5.2 Public Opinion and Suggestion 77 31. 5.3 Infomation Disclosures and Feedback 77 5.1.3 Information DisclosurePlan of the PPMOs.78 32. 5.4 Beneficial Participation Plan 78 33. 5.5 Summary of Public Participation 78 6 Analysis of Altematives ...... 80 34. 6.1 Analysis of "Without Project" Altemative 80

vii 6.1.1 Current Status of Natural Grasslands...... 80 6.1.2 Current Status of Pen-fed Livestock Development andfodderproduction80 6.1.3 Existingfeeding status, of sheep and dairy cattle.81 6.1.4 Present breed quality of sheep and dairy cattle...... 82 6.1.5 Existing constraints with Market Development .82 6.1.6 Presentstatus of applied research, extension and training.82 35. 6.2 Analysis of "With Project" Altemative 82 7 Analysis of Environmental Impacts & Proposed Mitigation Measures .. 84 36. 7.1 Potential Sources of Effect 84 37. 7.2 Analysis of Environmental Impact & Proposed Mitigation Measures in implementation & Construction Phase, Gansu 85 7.2.1 Floraand Fauna.86 7.2.2 Soil Erosion.87 7.2.3 Acoustic Environment.87 7.2.4 Air Quality ...... 88 7.2.5 Cultural Heritage.89 38. 7.3 Analysis of Environmental Impact & Proposed Mitigation Measures in implementation & Construction Phase, XUAR 90 39. 7.4 Analysis of Environmental Impacts & Proposed Mitigation Measures During Project Operation in Gansu 90 7.4.1 Semi-PastoralLivestock Development Model .90 7.4.2 Semi-pastoraland semi-agriculturalLivestock Development Model. 95 7.4.3 Intensive (pen-fed) Livestock Development Model .100 7.4.4 Diary Cattleproject .103 40. 7.5 Analysis of Environmental Impacts & Proposed Mitigation Measures in XUAR 108 7.5.1 Semi-PastoralLivestock Development Model .108 7.5.2 Intensive (mainly pen-fed) Agriculture Based Livestock Development Model 115 41. 7.6 Analysis of Environmental Impacts & Proposed Mitigation Measures for common environmental problems 118 7.6.1 Feed Processing .. 119 7.6.2 Feedlots...... 119 7.6.3 Wool Packing .. 120 7.6.4 Laboratory Chemical and Sewage Disposal.120 7.6.5 Disposal of Dead Animals . .121 42. 7.7 Environrnental Risk Assessment 121 8 Environmental Management Plan . . .124 43. 8.1 Implementation Organizations and Responsibilities 124 8.1.1 Implementation Organizations .. 125 8.1.2 Role of PMO and Environmental Monitors.128 8.1.3 Supervision Organization .. 129 8.1.4 EnvironmentalManagement Plan . .129 8.: .. 134 44. 8.2 Environmental Monitoring Plan, Gansu 142

viii 8.2.1 MonitoringItems ...... 142 8.2.2 MonitoringImplementer ...... 142 8.2.3 MonitoringReport System ...... 142 8.2.4 Pre-implementationMonitoring (Baseline data) ...... 142 8.2.5 Monitoringduring implementation/construction...... 143 8.2.6 Monitoringduring Operation ...... 144 8.2.7 MonitoringBudget ...... 144 45. 8.3 Enviror nental Monitoring Plan, XUAR 145 8.3.1 MonitoringItems ...... 145 8.3.2 MonitoringImplementer ...... 145 8.3.3 MonitoringReport System ...... 146 8.3.4 Pre-implementationMonitoring (Baseline data) ...... 146 8.3.5 Monitoringduring implementation/construction ...... 147 8.3.6 Monitoring during Operation ...... 148 8.3.7 MonitoringBudget ...... 148 46. 8.4 Environmental Training/lnstitutional Strengthening Plan 149 8.4.1 Training Objectives .. 149 8.4.2 TrainingCourses, Gansu . .149 8.4.3 Training Courses, XUAR . . 150 47. 8.5 Budgets, Gansu 150 48. 8.6Budgets,XUAR 151 9 Conclusions and Reconmnendations . . .153 49. 9.1 Major Conclusions 153 9.1.1 Selection of ProjectAreas .. 153 9.1.2 EnvironmentalImpact Analysis and MitigationMeasures .. 153 50. 9.2Reconmnendations 154 9.2.1 Follow-up Program .. 154 9.2.2 Public Participation .. 154 9.2.3 FurtherSuggestions and Environmental Requirements . .155 10 List of References ...... 156

ix List Of Tables

TABLE I-1 PRELIMINARY IDENTIFICATION MATRIX FOR MAIN ENVIRONMENTAL IMPACT FACTORS OF IPDP ...... 9 TABLE 3-1 PROJECT COUNTY DISTRIBUTION AND PRODUCTION SYSTEM ...... 24 TABLE 3-2 PROJECT COUNTY DISTRIBUTION AND PRODUCTION SYSTEM ...... 25 TABLE 4-1 THE CLIMATIC CHARACTERISTICS OF THE PROJECT AREAS IN GANSU PROVINCE30 TABLE 4-2 THE CHARACTERISTICS OF THE RIVERS IN GANSU PROJECT AREA ...... 32 TABLE 4-3 GROUNDWATER WATER TABLE CHANGE IN GANSU PROVINCE ...... 33 TABLE 44 SURFACE WATER QUALITY IN THE PROJECT AREA IN GANSU PROVINCE ...... 34 TABLE 4-5 IMPORTANT NATURE RESERVES RELATED TO THE PROJECT COUNTIES ...... 37 TABLE 4-7 THE POPULATION OF THE PROJECT COUNTY IN GANSU PROVINCE ...... 38 TABLE 4-7 LAND USE STATUS N GANSU PROVINCE ...... 40 TABLE 4-8 LAND USE STATUS IN THE PROJECT COUNTIES IN GANSU PROVINCE ...... 41 TABLE 4-9 TYPES AND AREA OF GRASSLAND INGANSU PROVINCE ...... 41 TABLE4-10 STATUSOFGRASSLAND RESOURCESINPROJECTCOUNTIESIN GANSU ...... 42 TABLE 4-11 PROJECT COUNTY/FARM INGANSU ...... 43 TABLE 4-12 BALANCE SHEET OF GRASS AND LIVESTOCK IN GANSU PROJECT AREAS ...... 44 TABLE 4-13 TOPOGRAPHIC FEATURES OF XUAR ...... 47 TABLE 4-14 CHARACTERISTICS OF SOIL IN THE PLAIN AND MOUNTAINOUS AREAS OF XUAR ...... 47 TABLE4-15 CLIMATECHARACTERISTICSOF MAJORPROJECTAREASIN XUAR ...... 50 TABLE 4-16 CHARACTERISTICS OF IMPORTANT RIVERS iN THE XUAR PROJECT AREAS .....52 TABLE 4-17 SURFACE WATER DISTRIBUTION OF MAJOR RIVER BASINS, XUAR PROJECT AREAS ...... 53 TABLE 4-18 CHARACTERISTICS OF IMPORTANT LAKES IN THE PROJECT AREAS ...... 54 TABLE 4-19 GROUNDWATER TABLE CHANGE TENDCY IN XUAR ...... 54 TABLE 4-20 NATURAL SHALLOW GROUNDWATER RESOURCES IN THE PROJECT AREAS OF XUAR ...... 56 TABLE4-21 WATER QUALITY ASSESSMENTOF MAJOR RIVERSBASINSINPROJECT AREAS, XUAR ...... 57 TABLE 4-22 GROUNDWATER QUALITY OF MAJOR RIVER BASINS IN PROJECT AREAS, XUAR ...... 58 TABLE 4-23 THE NATURE RESERVES IN THE PROJECT COUNTIES, XUAR ...... 62 TABLE 4-24 POPULATION STATUS INPROJECT AREAS IN XUAR ...... 65 TABLE 4-25 LAND USE INXUAR ...... 67 TABLE 4-26 LAND USE SITUATION INTHE PROJECT AREAS INXUAR ...... 68 TABLE 4-27 GRASSLAND RESOURCES IN PROJECT COUNTIES/FARMS IN XUAR ...... 71 TABLE 4-28 TYPES OF GRASSLAND IN XUAR ...... 72 TABLE 4-29 GRASS YIELD OF DIFFERENT GRASSLAND TYPES ...... 73 TABLE 4-30 GRAZING CAPACITY OF DIFFERENT TYPES OF GRASSLAND IN XUAR ...... 74 TABLE 7-1 ESTIMATED NOISE VALUE OF CONSTRUCnON MACHINERY ...... 88 TABLE7-2 PESTICIDEAPPLICATIONIN PROJECTAREASIN GANSU ...... 93 TABLE 7-3 TOTAL ANNUAL FERTILIZER APPLICATION IN PROJECT AREAS IN GANSU ...... 93 TABLE 7-4 PESTICIDE APPLICATION INPROJECT AREAS INGANSU ...... 99 TABLE 7-5 FERTILIZER APPLICATION IN PROJECT AREAS IN GANSU ...... 99 TABLE 7-6 PESTICIDE APPLICATION IN PROJECT AREAS IN GANSU ...... 102 TABLE 7-7 FERTiLIZER APPLICATION IN PROJECT AREAS IN GANSU ...... 102 TABLE 7-8 PESTICIDE APPLICATION IN PROJECT AREAS INXUAR ...... 114 TABLE 7-9 ANNUAL FERTILIZER APPLICATION IN PROJECT AREAS IN XUAR ...... 114 TABLE 7-10 ASSESSMENT RISKS TO PROJECT OPERATION ...... 123 TABLE 8-1 ENVIRONMENT MONITORING PLAN, IPDP, CHINA ...... 130

x TABLE 8-2 ENVIRONMENT MANAGEMENT PLAN FOR IPDP, CHINA ...... 134 TABLE 8-3 CONSTRUCTION AIR QUALITY MONITORING PROGRAM ...... 143 TABLE 8-4 NOISE MONITORING PROGRAM DURING CONsTRuCTION ...... 143 TABLE 8-5 COST ESTIMATION OF ENVIRONMENT MONITORING OF GANSU PROVINCE ...... 145 TABLE 8-6 CONSTRUCTION AIR QUALITY MONITORING PROGRAM ...... 147 TABLE 8-7 NOISE MONITORING PROGRAM DURING CONSTRUCTON ...... 147 TABLE 8-8 COST ESTIMATION OF ENVIRONMENT MONITORING OF XUAR ...... 148 TABLE 8-9 SALARY COST OF ENVIRONMENT PROTECTION STAFF OF PMOS, GANSU ...... 150 TABLE 8-10 COST FOR ENVIRONMENT TRAINING IN GANSU ...... 150 TABLE8-1 1 TOTAL COST ESTIMATION FOR ENVIRONMENT MANAGEMENT PLAN OF GANSU ...... 151 TABLE 8-12 SALARY COST OF ENVIRONMENT PROTECTION STAFF OF PMOS, XUAR ..... 151 TABLE 8-13 COST FOR ENVIRONMENT TRAINING IN XUAR ...... 152 TABLE8-14 TOTAL COST ESTIMATION FOR ENVIRONMENT MANAGEMENT PLAN OF XUAR ...... 152

xi List of Figures

FIG I -1 ASSESSMENT PROCEDURES FOR THE EA OF IPDP ...... 12 FIG 2-1 ORGANIZATIONAL STRUCTURE OF ENVIRONMENTALADMINISTRATIVE FRAMEWORK 15 FIG 3-1 MAP OF TWO PROJECT PROVINCES ...... 16 FIG 3-2 MAP OF THE PROJECT COUNTIES IN GANSU PROVINCE ...... 17 FIG 3-3 MAP OF THE PROJECT COUNTIES INXUAR ...... 18 FIG 4-2 SOIL TYPES IN XINJIANG ...... 48 FIG 4-3 MAP OF WATER RESOURCE DISTRIBUTION IN XINJIANG ...... 55 FIG 4-4 VEGETATION DISTRIBUTION IN XINJIANG ...... 60 FIG 8-1 ENVIRONMENTAL MANAGEMENT ORGANIZATION DURING CONSTRUCTION STAGE ... 127 FIG 8-2 ENVIRONMENTAL MANAGEMENT ORGANIZATION DURING OPERATION STAGE ...... 127 FIG 8-3 MONITORING REPORT CHART, GANSU ...... 143 FIG 8-4 MONITORING REPORT CHART, XUAR ...... 147

12

List of Abbreviations

AHB Animal Husbandry Bureau BOD Biological Oxygen Demand COD Chemical Oxygen Demand CPMO County Project Management Office CRAES China Research Academy of Environmental Sciences DO Dissolved Oxygen EA Environmental Assessment EC Electrical Conductivity EDC Ecological Demonstration County EIA Environmental Impact Assessment EMP Environmental Management Plan EMS Environmental Monitoring Station EP Environmental Protection EPB Environmental Protection Bureau FS Feasibility Study Gansu Gansu Province IFA International Fund Association IPDP Integrated Pastoral Development Project Masl Meters Above Sea Level MOA Ministry of Agriculture PEMO Provincial Environmental Management Office PLG Project Leading Group PPMO Provincial Project Management Office PRC Peoples Republic of China SEI Significant Environmental Issue SDPC China State Development and Planning Commission SEPA State Enviromnental Protection Agency TSS Total Suspended Solids TSP Total Suspended Particulates WB World Bank TOR Terms of References XUAR Xinjiang-Uyghur Autonomous Region

Exchange Rate US$ 1.0 = RMBY 8.26 (As of March 31,2002)

13

Executive Summary

The Integrated Pastoral Development Project (IPDP), a World Bank loan project, is a livestock development project, formally authorized by the China State Development and Planning Commission in 2002. The project was originally proposed by the Ministry of Agriculture in 1998 as a fine wool sheep development project to seek for loan from the World Bank.

The total investment of project is US $150 million, of which US$ 100 million will be from the World Bank loan. The proposed IPDP aims at improving the livelihood of the herders and livestock farmers in the project areas in Gansu Province (Gansu) and Xinjiang-Uyghur Autonomous Region (XUAR) through establishment of integrated, demand driven, and sustainable livestock production systems (including market systems). The project is also hope to be viewed by non-project counties as a demonstration project and other interested parties could use project's findings with regards to sustainable development of livestock project in their own development systems. The project also aims at improving the overall living standards of farmers and herders overall through improving natural grasslands, developing artificial grasslands, upgrading the quality of fine wool and mutton sheep, and establishing marketing and technological extension systems suitable to the development of livestock sector.

In Gansu, the project covers 14 counties/cities in nine prefectures, one corporation and two farms that are managed by the Gansu Provincial Agriculture and Animal Husbandry Bureau. Sunan and Huangcheng Sheep Stock Farm will focus on the development of fine wool sheep, while development of mutton sheep will be the main project activity in , Wuwei, Yongchang, , Jingyuan, Linxia, Kangle and the provincial livestock and poultry breeding farm. , Lintao, Hovill Group, Lintan and Dingxi will feature dairy cattle.

In XUAR, Project areas include 32 counties eight prefectures, and 3 sheep breeding farms in Gongnaisi, and Bazhou. With the exception of project counties in Yili prefecture, most other counties in XUAR are mainly involved in mutton sheep production.

The annual average temperature in Gansu varies between 0.2 °C to 15.0 °C, while the annual average precipitation varies between 35mm and 742 mm. Precipitation is unevenly distributed both within the region and between seasons. Most of the precipitation is in the form of major storm events, causing severe soil erosion in certain parts of the province. Majority of precipitation occurs between July and September accounting for more than 60% of the annual precipitation.

XUAR, being far from open waters, has a typical continental climate with cold winters and warm and sunny summers. The southern and central parts of the region have typical desert oasis agricultural development characteristics (ecological zone). Long sunny days, high available degree-days, and long frost-free periods provide a good climatic environment for agricultural and livestock production. However, the annual precipitation is not adequate in many parts of the region and evapotranspiration rates generally exceed precipitation by many folds. Precipitation in the mountainous areas, however, appears to be higher and evapotranspiration more moderate, allowing for the development of alpine and sub-alpine ecological zones and high quality grasslands that are mainly used for grazing. Except for Sunan County, and project counties in Gannan prefecture, the majority of project counties in Gansu rely mainly on fodder, forage and agricultural by-product as animal feed source. The major grassland ecological zones in Gansu include desert grassland, steppe grassland, meadow grassland and marsh grassland. Signs of grassland degradation, probably due to overgrazing is apparent in majority of grasslands within the project areas. The grassland degradation is as low as 10 to 20% in Sunan County with an average degradation rate of 30%, of which 50 to 60% are slightly degraded.

Due to the large size of XUAR (1.65 million square kilometers), a variety of different grassland types exist in the region. Main grasslands ecological zones in XUAR include temperate meadows, temperate steppes, temperate deserts, alpine steppes, alpine deserts, low-lying meadows (wet meadows), mountain meadows, alpine meadows and marshlands. Most natural grassland areas in XUAR show signs of degradation at different severity levels, probably due to overgrazing and/or ecological pressures. According to the available statistics, over 80% of natural grassland in XUAR show some degree of degradation, while one third are believed to be seriously degraded. Apparently the grass yield of natural grasslands have dropped an average of 30 to more than 50%, compared to the yields in the 1960's.

Both Gansu and XUAR suffer from shortage and/or poor distribution of water resources. In Gansu, the areas to the north of an imaginary line between Liupan Mountain-Qingliang Mountain- and Qilian Mountain suffer from shortage of water resources, while most of the areas to the south of the line enjoy abundance of water resources. Areas to the north of the line with inadequate water resources include eastern Gansu, the massive and areas to the north of , where annual runoff depth is only 5 to 50 mm, while the areas to the south have an annual runoff depth in the 100 to 300mm range that increases to as high as 600 mm in the mountainous areas. River flow regime also is poorly distributed, having a small flow in spring and winter, while reaching the peak flow in fall and declining again in summer months. Water flow of inland rivers is mainly concentrated in June to September, accounting for 70 to 75% of the annual flow.

XUAR also suffers from scarcity of water resources. Even though water resources are rather abundant in some areas, but the conditions are poor for water use. There are over 570 rivers in XUAR, and the water flow in the rivers varies dramatically. Most of the rivers have short course and small water flow. The total surface water runoff in the entire XUAR is 88.4 billion m3 while 25.2 billion m3 of groundwater could be tapped. There are several dozen of rivers traverse in the project areas of XUAR and most of them are inland river system. However, Eerqisi River in northern XUAR flows into the Arctic Ocean via Ebi River in . Chabuchar River in the southwest of XUAR flows into the Indian Ocean via India. Among the inland rivers, Yili River and Emin River flow into Kazakhstan. Water resources are more in northern XUAR than in the southern part, more in the west than in the east, more on the slope in the direction of wind than against. For example, the area of northern XUAR is only 27% of the total, while surface water resources account for 52%. Area of southem XUAR accounts for 73% while surface water resources is only 48%. Generally speaking, water quality in the project areas is rather good. Groundwater resources in the project area are relatively rich and the groundwater table variation is not so dramatic. The groundwater table in Maigaiti County of prefecture in southern XUAR is very shallow causing soils to become saline or sodic in the region.

This environmental impact assessment report will not only satisfy relevant environment protection requirements of China, but also those of the World Bank. The World Bank

iii classifies this project as Category B. The environment assessment group of this project divides the project into two general categories of Gansu and XUAR in line with the production system of this project. Then, according to the ecological types, project areas in Gansu and XUAR are further outlined. The project counties in Gansu can be divided into 6 ecological zones while in XUAR there are 7 ecotypes. While implementing the environmental impact assessment, the production system is uphold as the mainstream while ecotypes serve as reference. In association with,the river basin distribution in both Gansu and XUAR, the overall enviromnental impact of the project is assessed; especial emphasis is given to the assessment of impacts to the grassland and water resources on which the sustainable development of the project depends.

The results of environmental impact assessment indicate that, in general, the project of integrated livestock development in China is a good project, the implementation of some subcomponents of the project is conducive to the improvement of the environment, and its impacts to the social environment is positive. If the project can be smoothly implemented, and mitigation and control measures recommended in this report are adopted, the impact of the project to the environment can be minimized. It is recommended that the World Bank and relevant departments in China support the implementation of this project and urge the earliest start of the project.

However, if the selection of project locations is improper, and no appropriate mitigation measures were taken, the project possesses potential negative impact to the environment, which might even influence the base of sustainable development of the project. On the other hand, if effective mitigation measures were taken, the negative impact level to the environment the project might cause will not be significant.

The negative impact to the environment during implementation/construction phase of the project in both Gansu and XUAR is temporal with very limited magnitude. The major potential impacts to the environment include: impact to vegetation due to temporary land occupation at the construction sites, pollution of waste of daily life at the construction site and noise and dust of the construction machinery. If the mitigation measures proposed in the Report were implemented properly, the negative impact to the environment during implementation/construction phase can be minimized.

For most the project areas in Gansu, if the number of livestock will not increase or it even decreases, implementation of the project will not produce significant negative impact to the environment, on the contrary, if the project will be implemented as planned, it will generate positive impact to the ecological and social environment. The development of artificial grassland will reduce the pressure on natural grassland. The improvement of natural grassland is beneficial to the bettering of the ecological environment quality of the project areas. Fencing of winter pasture will not cause significant negative impact to nature reserves and endangered species of plants and animals. Wild grass species will be used for supplementary sowing in natural grassland,' so it will not produce negative impact to biodiversity. Artificial grassland will be developed on rather flat farmland, hence it will not aggravate soil erosion. Since the conversion of farmland into irrigated grassland will reduce fertilizer application by 40% and pesticide application by 50%, reduced application of agricultural chemicals will produce positive impact to the improvement of soil.

As for dairy subcomponent of Gansu is concemed, dairy cattle raised by farmer households and small-scale dairy farm with 50 heads of animals will not produce significant negative impact to the environment. For the larger-scale dairy farms, since it is

iv unclear yet about the location and implementation plan, it is impossible to discern the level of its impact to the enviromnent.

For the project areas in XUAR, if the number of livestock will not increase or it even decreases, the project will not produce significant negative impact to the environment. On the contrary, if the project will be implemented as planned, project activities, such as grassland improvement and artificial grassland development, will generate positive impact to the ecological and social environment. The improvement of natural grassland is beneficial to the bettering of the ecological environment quality of the project areas, and it will also increase the grazing capacity of natural grassland. Artificial grassland development will alleviate the pressure on natural grassland, and it is helpful to control soil erosion. Fencing activities will not cause significant negative impacts to nature reserves and endangered plant and animal species. Local wild grass species will be used for supplementary sowing after taming, so it will not cause significant negative impact to biodiversity. Since the conversion of farmland to irrigated grassland will reduce fertilizer application by 40% and pesticide application by 50%, reduced application of agricultural chemicals will produce positive impact to the improvement of soil.

In both Gansu and XUAR, the major challenge to face in selection of project location is the limitation of water resources, especially in project counties in the areas (including Jiuquan and Zhangye) and Dingxi where water resources are severely scarce. The groundwater table in some areas has deepened significantly. Water resources are not abundant in project counties of Maigaiti and Tulufan, in other words, the usable level of water resources is not high. Alfalfa will be planted on artificial grassland, which consumes large quantity of water, therefore, implementation of the project will impose rather heavy pressure on water resources and that in the lower reaches of river basin. Under the condition that the location of artificial grassland is unclear at present, it is difficult to discern the impact degree. The project should, in line with the water resources planning of the region, make sure that there are sufficient amount of water resources available for the project. It is recommended that grass species demanding less water should be planted and water saving irrigation technologies should be adopted.

In line with these potential negative impacts, the report proposed corresponding mitigation measures with the expectation to minimize the potential impacts. Therefore, the environment management plan for Gansu and XUAR respectively is presented in Chapter 8, in which the responsibilities of the Project Management Office and other related institutions, environment management training and environment monitoring plan and cost have been clearly spelt out.

v 1 Introduction and Project Background

China Government has applied for the World Bank Loan for support to promote animal husbandry transferring from quantity-orientated model to quality-orientated and sustainable model. The Integrated Pastoral Development Project, covering Xinjiang- Uyghur Autonomous Region (XUAR) and Gansu province (Gansu) that hereafter is called IPDP is the outcome of this request.

1.1 Purpose of the Report

The proposed IPDP aims at improving the livelihood of herdsmen and livestock farmers within the project areas through integrated, demand driven and sustainable animal husbandry and production systems (including market system). The aim of the project is to support introduction of improved sheep and cattle breeds, grassland improvement and betterment of livelihood of the herders and sheep and dairy farmers through initiation of a demand driven project. The achievement of these objectives should lead to reduction of poverty and greater social stability in the project areas as well as enhancing food security for the project areas and the country as a whole.

The aims of this EA report include: (i) Qualitative analysis and assessment of present natural environment and the socio- economic conditions in the project area and determine the scope and extent of future impacts. The implementation of the project is reviewed and examined in terns of environmental protection; (ii) To determine the potential environmental impacts and to disseminate the findings to the project development and implementation teams; and (iii) To prepare mitigation measures to reduce/eliminate the identified negative impacts and prepare an environmental management plan (EMP) for pre-implementation, implementation/construction and operation of the project.

The terms of reference (TOR) for compilation of the EA report between the Ministry of Agriculture (MOA) and the Chinese Academy of Research for Environmental Sciences (CRAES) is presented as Annex A.

1.2 Brief Introduction to the EA Report

1.2.1 Importance of the Project The IPDP project areas are located in Western Region of China where the ecological and social environment is rather sensitive. There are many minority nationalities, especially in XUAR that make up about 50% of the total population of XUAR. Grasslands are somewhat degraded due to both overgrazing and natural processes, and water resources appear to be unevenly distributed, resulting water shortages in a number of project counties. The project areas are economically less developed compared to the rest of the PRC and integrated projects such as IPDP could have significant effect in improving the opportunities for betterment of the livelihood of the project beneficiaries. Implementation of the proposed project, although not in a large scale, but at a pilot level could have significant impact on methodology used to improve the status and quality of livestock and livestock related natural resources (grasslands, water resources use efficiency, soil resources). In addition, other herders/livestock farmers, living within the neighboring counties, could also adapt the lessons learned from the project implementation that could provide additional intangible project benefits. Over the past period, the development in west China has witnessed both success and failure with lessons to be drawn upon. The IPDP project is seeking a win-win approach, i.e. to both develop livestock through breed improvement, and assure sustainable utilization of resources through grassland improvement and adoption of more efficient irrigation methods. 1.2.2 Structure of the Report The report provides an assessment of the environmental impacts of the development of IPDP. It is arranged in the format provided by the World Bank for rural development projects. Section 2 describes the institutional and admninistrative framework and the national policies and strategies in relation to such development schemes. Section 3 provides a description of the proposed development project, while Section 4 provides a description of the existing physical (natural), ecological and socio-economical environment, which is specific to the proposed project and neighboring areas. Section 5 describes the public participation whereas Section 6 describes the alternatives that have been considered in the project planning process, mainly with or without the project. Section 7 identifies the potential impacts that could be expected from the proposed project both during construction and operation and proposes viable mitigation measures for to minimize these impacts. Section 8 is devoted to the presentation of an environmental management plan (EMP) for the proposed project including the implementation framework, a mitigation plan, a monitoring plan for the pre- implementation, implementation/construction and operation periods and a training plan, while section 9 presents the general conclusions and recommendations.

1.3 Bases of Assessment

This assessment was carried out according to the laws and regulations of the People's Republic of China (PRC) and the World Bank technical documents. A list of the material used for the preparation of this report is presented below. 1.3.1 Laws and Regulations - Environment Protection Law of the PRC (December 26, 1989); - Water and Soil Conservation Law of the PRC; - Prevention and Treatment Law of Atmospheric Pollution of the People's Republic of China. - Prevention and Treatment Law of Water Pollution of the PRC;

2 Prevention and Treatment Law of Noise Pollution of the People's Republic of China This is not needed for this project; Prevention and Treatment Law of Solid Waste Pollution of the PRC; Pasture Law of the PRC; The Administrative Rules for the Environmental Protection of Construction Projects (The State Council Decree No. 253, November 18, 1998; State Environment (86) No. 003 "Administrative Regulations of Environment Protection for Development Projects"; The Administrative Rules of The Water & Soil Conservation Law of the PRC; The Administrative Rules of The Land Administration Law of the PRC; The Administrative Rules for Pesticide; Regulations for Pesticide Registration; Regulations for Safe Use of Pesticide; The Regulations on Nature reserves of the PRC (The State Council Decree No. 167, September 2, 1994); The Regulations on Protection of Wild Flora of the PRC (The State Council Decree No. 204, September 30, 1996); The Wild Fauna Protection Law of the PRC (The People's Congress, November 8, 1988); Notice on Further Strengthening the Administration of Nature reserves in the PRC (The State Council, No.1 1 1, 1998); and State Environment Development (88) No.117 "Stipulations on Environmental Administration Issues for Development Projects". 1.3.2 Technical Documents

- The World Bank Operational Policy 4.01,4.04,4.09,4.11,4.37; - Industrial Criteria for Environment Protection of PRC "Technical Directive for Environmental Impact Assessment" (HJ/T2.1-2.3-93); - Industrial Criteria for Environment Protection of PRC "Technical Directive for Environmental Impact Assessment (Sound Environment)" (HJ/T2.4-1995); - Proposal of the World Bank Loan CGID Project; - Consignation Letter for Environmental Impact Assessment Report of the World Bank Loan CSID Project; and - Terms of References (TOR) for an Environmental Assessment of the IPDP. 1.3.3 Main Design Documents

- Proposal for Chinese Integrated Pastoral Development Project with the World Bank Loan; - Feasibility Study Report for Chinese Integrated Pastoral Development Project with the World Bank Loan; - Feasibility Study Report for Gansu Integrated Pastoral Development Project with the World Bank Loan; - Feasibility Study Report for Xinjiang Integrated Pastoral Development Project with the World Bank Loan.

3 All the above documents are available at CRAES and/or respective PPMOs.

1.4 Principles of Environmental Assessment

This EA has been prepared to satisfy the requirements of both the World Bank and China's Environment Protection Bureau (EPB) on environmental impact assessment of development projects. The principles of the sustainable development objective and scientific evaluation are followed in the EIA and design of the environmental management plan for the IPDP. The same attention are paid for both economnic development and environment protection so that the economic growth keeps the same pace with the environmental protection and does not cause significant negative environmental impacts. Special attention is paid in this study to ensure that pastures and water resources are used in a sustainable manner and detailed environmental management plans are developed to minimize/prevent any potential damage that project might cause on the natural (ecological) or social environment. If any sub-component of the project appear to have a potentially significant negative impact on the environment, such as large dairy farms or cattle fattening feedlots, a detailed assessment will be made of such sub- components that could potentially cause environmental pollution (soil/water) and more detailed and project specific measures will be developed in order to provide basic documents of environment protection to be used during project implementation. To prevent duplication of effort and to reduce the project cost, as much as possible the EA team has made full use of the available data and findings in preparation of this report.

Since the project is generally a natural resource (grassland) and domesticated animal breed improvement project (sheep, cattle) and does not include any major land clearing or construction activities, it is classified as a Category B project according to the World Bank Operational Policy (OP 4.01). Therefore, the EA is carried out in a "simplified way" with main attention of the study being on the significant environmental issues (SEI) likely to be caused by the project. This assessment was made based on the consultations with the World Bank consultants, Chinese Environmental specialists and EPB.

An assessment method of environmental matrices is used for this EA. This method has been widely used in the environmental assessment of various projects since proposed by Leopold, et al.' (1971). An environmental matrix employs a list of project activities and a list of environmental parameters or impact indicators. The two are related in a matrix in order to identify cause-effect relationships. Column headings generally list the project activities while the row headings show the environmental parameters of the affected system. Entries in the resulting matrix cells may simply show that an interaction takes

' Source: Leopold, L.B., Clarke, F.E., Manshaw, B.B. and Balsley, J.R. (1971), A Procedure for Evaluating Environmental Impacts, U.S. Geological Survey CircularNo. 645, Government Printing Office, Washington, D.C.

4 place or they may be qualitative or quantitative estimates of the interaction. Table 1-1 represents the preliminary identification matrix, prepared for the IPDP.

1.5 Relationship to Feasibility Study

According to the provisions in Clause 9 and 17 of EnvironmentalProtection Regulations for Construction Projects, project construction unit should submit its EA report to the pertinent environmental protection agency with authority to review and approve, and the approval should be obtained during the feasibility study of the project. In the preliminary design report, a specific chapter should cover environmental protection, inclusive of related national environmental standards, environmental impact mitigations and relevant design. In addition, it should also cover the possible environmental impact from the project, mitigative or preventive measures to reduce/prevent environmental impact and potential causes of environmental pollution.

As required by the World Bank, the EA report was prepared simultaneously with project preparation. Report was prepared in close cooperation with the local PPMOs, the social assessment (SA) teams, other project teams working on different project components, review of the feasibility study report and consultation with the local communities, farmers and herders. The EA team has conducted extensive discussions with the SA teams and prepared questionnaires related to environmental issues to be asked by the SA team during their field visits. This EA was prepared in close association with the feasibility study teams and should be considered as an integral part of the feasibility study. A section must be added in the feasibility report to cover all environmental issues discussed in this report and the environmental management plan costs should also be included in the project budget.

In a bid to off-set or mitigate the potential impact to the environment at the design stage, the EA team has already provided the PPMOs in Gansu and XUAR with the draft working guidelines to satisfy the needs for environmental protection, and discussed with the feasibility team as how to ensure coordination between environmental protection and economic development. As was mentioned earlier, the EA team has conducted extensive discussions with the social assessment (SA) teams and has held in-depth discussions with the said team as to define the questionnaire related to environmental management, and submitted the questionnaire to the SA team. The EA team has used the main findings of the SA team in the EA report. The project could impact farmland utilization, and irrigation and drainage methods that are in use within the project areas. The EA team discussed such issues in detail with the feasibility study teams and their commnents were reviewed in detail. The possible environmental issues were analyzed and necessary mitigation measures were considered and costed in the EMP. In summary, the EA team has prepared the EA report, in close collaboration with other technical teams involved in the preparation of the feasibility study reports for the IPDP project.

5 1.6 EA Team

The EA team is composed of 5 senior specialists and 6 experts for environmental impact assessment, with some 10 supporting staff. The team members are primarily pertinent researchers from CRAES, and secondarily staff from People's University of China, consulting firms familiarizing the ecological environment in west China. The posts of each EA team member, specialties, and tasks in this EA and the man-months used by each member are listed in Annex B.

The Chinese Research Academy of Environmental Sciences (CRAES), the only national comprehensive academy for research of environmental sciences in China, is currently staffed with approximately 500 research personnel, among which 3 are academicians of Chinese Academy of Engineering, some 30 researchers/professors, and 50 associate researchers/associate professors.

CRAES has carried out a number of in-depth research studies, and the achievements from the studies have offered scientific basis and technical approach for the decision-makers in defining the national and regional environmental standards and the ecological zoning in the west, as well as working out the national environmental management policies for different regions and sectors. In terms of international cooperation, the CRAES has established long-term relationship for cooperation with dozens of institutions in more than 10 countries. At present, a number of scientists from Japan, USA, Canada, and South Korea are participating in CRAES research projects.

In addition to the basic and applied research, CRAES has carried out a series of environmental impact assessments for development projects, authentication of ISO14000, review of hygiene production as well as design for environmental engineering projects.

In west China, Gansu and XUAR, where the ecological environment is rather sensitive, the CRAES has also conducted substantial basic and applied research. In the year 2000, survey on the western ecological environment was undertaken, using remote sensing covering such areas as grassland degradation, soil degradation, change in land uses, and the evolution of the ecological environment in western region. In October 2001, the first stage of the program was completed. At present, CRAES is undertaking assignment for ecological zoning in west China, ecological environment planning for west China, ecological environment planning for the Yangtze River Basin, and fixed-point and dynamic monitoring for desertification. In recent years, CRAES has also undertaken a n umber of environmental impact assessment assignments for international funding agencies such as the World Bank, the Asian Development Bank projects, and CIDA.

1.7 Assessment Scope and Periods Covered

1.7.1 Assessment Scope

6 The study area covered in the EA study covers 13 counties in nine prefecture in Gnasu and 32 counties in 10 prefectures in XUAR.

The project counties in Gansu include Jinngyuan (Baiying Prefecture), Lintan and Zhouni (Gannan Prefecture), Linxia and Lintao (Linxia Prefecture), Jiuquan City, Jiuquan Prefecture, Liang Zhou (Wuwei Prefecture), Sunan, Zhangye City (Zhangye Prefecture), Yongchang ( Prefecture), Qingshui ( Prefecture). In addition four sheep breeding farms (Huangcheng, Jingtai, Minshan, and Yongchang) and one dairy production enterprise (Hovill Dairy Company) are included in the project.

The project counties in XUAR include Xinyuan, Zhaosu, Tekesi, Gongliu, Huocheng, and Chabuchar (Yili Prefecture), Tacheng City, Emin, , Shawan, Yumin (), Bole City, Wenquan (Boertala Prefecture), City, , Hutubi, Jimusaer, Manasi, Qitai (Changji Prefecture), Baicheng, Wensu, Kuche (Bayinguolen Prefecture), Fuhai, Fuyun, Altai City (Altai Prefecture), Shache, Maigaiti (), City (Hami Prefecture, and Tulufan City (Tulufan Prefecture). In addition, three sheep breeding farms (Gongnaisi, Tacheng, and Bazhou) are also included in the project. 1.7.2 Periods Covered The environmental assessment covers different phases of project implementation including: 1) Design Stage 2) Implementation/Construction period (6 years) 3) Operation Period (5 Years)

1.8 Assessment Factors

The proposed project is an integrated Pastoral development project, comprising grassland improvement, artificial pasture development (irrigation), livestock breed improvement, training and extension, and market system development. Therefore, the environmental impacts and their interactions are complex. The assessment factors are identified using an environmental interactive matrix (Table 1-1) based on field surveys, collection of secondary data, consultation with the other study teams, the environmental sensitivities of the project areas, and lessons learned from other similar grassland and livestock development projects. The identified environmental factors include: 1) Social Environment: public health, land use, socio-economy, downstream water users, cultural relics, minorities and disadvantaged people and historical sites; 2) Ecological Environment: flora, fauna, nature reserves, freshwater fisheries; and 3) Physical (natural) Environment: - Water environment: water hydrology, water quality (including pH, CODM,, nutrients such as TN and TP); - Ambient Air: total suspended particulates (TSP); - Soil erosion; and

7 Solid waste (feedlots, dairy sub-component)

1.9 Assessment Focus and Categorization

The special topic assessment category and basis for classification of environment set by China General Bureau of Environment Protection is presented in accordance with the Technical Guidelinesfor EnvironmentalImpact Assessment (HJ/T2. 1-2.3-93, HJ/T2.4-1995, HJ/T19-1997). The assessment focuses project impact on the ecological environment, water environment and social environment during implementation and operation phases. Furthermore, water quality, land use, soil erosion and grassland degradation are identified as the main factors of this EA based on potential environmental impacts. The water quality assessment focuses on the impact of farmyard manure and pesticide application on surface and ground water in special cases where large number of animals are confined in a relatively small areas (cattle fattening, dairy farms, and areas of intensive grazing), while land use assessment focuses on the changes in land use practices through potential increase of artificial pastures and change in agricultural practices (introduction of irrigated pastures).

8 Table 1-1 Preliminary Identification Matrix for Main Environmental Impact Factors of IPDP Environmental Parameters Physical Environment Ecological Environment Social Environment

Project Components S I

~~6 ~~~ o -a

Grassland Management Natural Grassland Improvement (reseeding) O 0 1 2 0 10 O 0 3 1 l OI O 0 Rotational grazing through fencing O O O 1 O | O O I 12 0 O O TO Control of rodents, poisonous plants and grasshoppers/locust 0 - - 0O- O2 0 0 l |0O _0O O Artificial Grassland Establishment l 0 - O O 0O 1 1| 2 ° ° - Animal Production Improvement Nucleus Breeding Farms (Fine wool within breed improvement) 0 -I 0 -I 0 | O0 0O 0 | 0 2 0 | 0 0

Multiplier Breeding Farms (Native fine wool within breed 10 -1 | O- -I | O | O|0 0 2 0 | 0 0 improvement) I - - 11111:

Semi-pastoral Production O 0 0 | 0O -I 0 -1 I | 0 | | 1 _ Pen Feeding (Cross breeding with imported breeds and mutton O O0 O O | 0 2 2 0 2 2 2 2 0 production) Feedlot Development Forage/fodderProduction -Il -I O I 0 O 0 O 0 0I 0 I I I 0 0 1 Forageand FodderProcessing 0 0 -I 0 -I 0 0 0 0 0 0 0 0 0 0 0 I 0O Notes: 0= No Impact I = Slight positive impact 2 = Medium positive impact 3 = Significant positive impact - = Slight negative impact -2=Medium negative impact -3=Significant negative impact * If native seed mix is applied, otherwise the effect is -2 + If there is no competition for feed between wild animals and livestock, the impact is zero.

9 Table 1-1 Preliminary Identification Matrix for Main Environmental Impact Factors of IPDP Environmental Parameters

Physical Environment Ecological Environment Social Environment

Project Components i

Dairy Cattle Development Dairy Cattle breeding farm (with up to 200 Dairy Cattle) 1 1 O 0| 1-I -2 0 O0 0 [0 [ jO _I 10 | 011 -l Dairy Cattle breeding farm (with up to 50 Dairy Cattle) O O 0 01 1 10 1 1 10 01 10 Small holder Farm (with 1-5 Dairy Cattle) 10 jO JO [ J 1_ o 101O O 0O O 1 _ 101|O 01 Market Systems Development Wool sheering/Processing | ° | ° | -1 | ° 0 ° [ ° 1| 0° 1|0 | I 10| Applied research, training and extension AppliedResearch O O 0 | |1 | 0 |1 O0| || _ O O | l |_ | _ | 1 0 O Training 0 | 0O | O0 0 0 | 0 0 I ° 1 ° Lab O I O 0 0 0 ° 1 ° ° ° I | ° Extension O0 _OO 0 j0 O 0 1 0° 0 I 0 °0 1I Notes: 0= No Impact I = Slight positive impact 2 = Medium positive impact 3 = Significant positive impact -1= Slight negative impact -2=Medium negative impact -3=Significant negative impact

10 1.10 Assessment Criteria According to the environmental function zoning of the environmental protection administrative departments in the project counties, the following standards will be adopted for this assessment. The assessment standards include quality standards and discharge standards. For quality standards, those required for protection of the functions in the recipient environment zone in view of pollution inflow will be applied. As to discharge standards, if available, corresponding discharge standards for the sector will be applied. If standards are not available, pertinent discharge standards will be applied for each special pollutant. Based on the geographical distribution and environmnental features in the project areas, the following standards will be applied.

A. Surface Water Quality Standard (i) Class II of the Environmental Quality Standard for Surface Water (GHZB 1-1999) for drinking water source protection area; (ii) The Water Quality Standard for Cropland Irrigation (GB5084-92) for irrigation water; (iii) Class II of the Environmental Quality StandardtforSurface Water (GHZB 1-1999) will be adopted for the assessment of surface water quality of urban river section and urban downstream river section.

B. Drinking Water Quality Standard (i) Sanitary standard for Drinking Water Quality (GB 5745-85)

C. Ambient Air Quality Standard (i) Class 12 of the Standard for Ambient Air Quality (BG3095-1996) for the residential areas; (ii) Maximum Concentration Limits of Air Pollutants, for Farmland Crops Protection (GB9137-88).

D. Soil Quality Standard (i) Environmental Quality Standard for Soil (GB 15618-1995)

E. Standard for Pesticide Use (i) Standard for Safe Use of Pesticide (GB4285-89); (ii) The WHO Recommended Classification of Pesticides by Hazard and Guidelines to Classification 2001-01 (WHO/PCS/01.4) 1.11 Assessment Focus and Categorization Since the project is generally a natural resource (grassland) and domesticated animal breed improvement project (sheep, cattle) and does not include any major land clearing or construction activities, it is classified as a Category B project according to the World Bank Operational Policy (OP 4.01).

The goals of this study are to ensure that the project will not have any significant impact on the physical, ecological and/or social environment of either XUAR or Gansu. The study focuses on the potential impact of the project, especially on the pasture and water

2 Air quality is divided into three classes in the StandardforAmbientAirQuality (BG3095-1996). Class I is applicable to nature reserves, scenic spots and other regions needing special protection; Class ll is applicable to rural region and urban residential region; and ClasslII is applicable to industrial region. resources, the health of human inhabitants, domesticated and wild animals in project areas, the biodiversity, and to ensure the sustainable growth within the project areas. 1.12 Assessment Procedure The procedure for this assessment is presented in Figure 1-1.

Assignment of EA Task

Field Studies

Identification of the Objectives of IEnvironmental Assessment

Selection of Environmental Impact Factors

Social Envirornment Ecological Envirornment IPhysical Environment

Social Environment Ecological Environm ent Physical Environm ent

Environmental Environmental Standard Impact Assessment

; ~~~~Compilation of Mitigation Measures Environmental Monitoring Compilation of EA -FM I~~~~~~and Management Plan Report

Fig. 1-1 Assessment Procedures for the EA of IPDP

12 2 Policy, Legislation & Administration Framiework As requested in the Notice on Strengthening the EA work for Construction Project with Loans from Intemational Financial Institutions (Document NO.324), IPDP has to implement the Chinese laws, regulations & standards on environmental protection (EP) and EA regulations and requirements. In addition to the relevant Chinese regulations on EA, the project should also follow the technical requirements of the World Bank. The EA report is subjected to review and approval of the State Environmental Protection Agency (SEPA) and the World Bank Safeguard Group. 2.1 Organizations & Administrative Framework At present, a system of uniform environmental supervision and management is in place in China that is practiced by SEPA and local environmental protection bureaus (EPB) under the direction of the State Council. In addition to SEPA, each concerned ministry and commission has a separate environmental protection department that is responsible for sector environmental projects within their areas of interest. They are also ultimately under the supervision of SEPA. The organizational structure of environmental administrative is presented in Fig. 2-1. 2.2 National Policy & Strategy for Environmental Protection The environmental protection is considered as one of the major national policies in China. The long-term strategy is to develop projects that are both economically and environmentally sound.

China has established an integrated legislative system for environmental protection. The Chinese legislation, regulations that IPDP should follow, include:

1) "The PRC Constitution ", mainly, Article 26, Section 2 of Article 9 and Section 5 of Article 10 spells out the provisions for the environmental protection, pollution control, rational utilization of natural resources, protection of rare and precious animals and plants, and rational land use. These activities provide the basis and the guideline for legislation on EP in China; 2) " The EP Law of PRC" (December, 1989); 3) "The Provisions on EP Management for Construction Projects" (Decree 253 of the State Council, 1998); 4) "The Circular on Improved Management of EIA for International Financial Institution-Financed Projects" (No. 324).

According to the requirements of Gansu Provincial Environmental Protection Bureau (GPEPB) and XUAR (XUAREPB), IPDP should follow the following rules and regulations.

1) Decision of the Government of XUAR on further strengthening of Environmental Protection. Number 4 (1993), issued by the Communist Party Committee of XUAR; 2) Management Regulations of Nature reserves of XUAR (Adopted on January 22, 1997 by the 25'h Session of the Standing Committee of the Eight People's Congress of the XUAR); 3) Water Resources Management Regulations of Tarim River Basin (Adopted on December 11, 1997 by the 30th Session of the Standing Committee of the Eight People's Congress of XUAR;

13 4) Methods of Implementing "the Wildlife Preservation Law of the People's Republic of China" in XUAR (Adopted and promulgated for implementation on November 2, 1991 by the 23d Session of the Standing Committee of the Seventh People's Congress of XUAR); 5) Decisions made by the Gansu Provincial Government on issues related to environmental protection; 6) Environmental Protection Regulation for Gansu province issued by the I O1 Session of Standing Committee of the eight People's Congress of Gansu Province (Adopted and promulgated for implementation on August 3, 1994). It was revised according to "Decisions on the Revision of the Environmental Protection Regulations of Gansu Province" of the 29h Session of the Standing Committee of the People's Congress of Gansu Province on September 29, 1997; and 7) Management Regulations of Nature reserves of Gansu Province (Adopted by the 12h Session of the Standing Committee of the Ninth People's Congress of Gansu Province on September 26, 1999. 2.3 WB Requirements According to the WB requirements, the EIA report for IPDP should satisfy the following Bank policies: 1) Operational Policy 4. 01 Environmental Assessment 2) Operational Policy 4. 04 Natural Habitat 3) Operational Policy 4. 09 Pest Management 4) Operational Policy 4. 10 Indigenous People 5) Operational Policy 4.1 1 Cultural Property 6) WB Procedures 17.50 Information Disclosure

EA team has reviewed and understood the above policies and would follow the technical requirements of the WB as outlined in the WB EA Source Book.

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15 3 Project Description The proposed project is located in Gansu Province and XUAR in Western China (Fig 3- 1). Integrated Pastoral Development Project (IPDP), a world-bank loan project, is an integrated grassland improvement and livestock (Fine-wool sheep, mutton sheep, and dairy cattle) development project authorized by China State Development Planning Commission in 1999. The total project investment is approximately 826 millions Yuan RMB, including World Bank loan of about 75 millions US dollars. The project covers 32 counties in XUAR and 14 counties in Gansu Province. Fig. 3-2 and Fig 3-3 present the distribution of the project counties within Gansu Province and XUAR, respectively.

-*'**. .S * ** . Gansu~~~~~~~~~~ . * ' t*.-

m : .. -- **--* ; .-. 3

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Fig. 3-3 Map Of the project counties In XUAR

3.1 Project Goals The main goals of IPDP are to: (i) To support sustainable development of livestock industry and reducing grassland degradation within the project areas through improvement of natural grasslands, establishment of artificial grasslands and improving feed production; (ii) To introduce improved breeds of sheep and dairy cattle that are adaptable to local faming and environmental condition; (iii) To increase the income, to improve the living conditions, and to promote social and economic development of project beneficiaries through improvement of marketing system and provision of adaptive science and technology to increase their productive capacity; and (iv) To improve the quality and increase the yield of fine-wool sheep, mutton sheep, and dairy cattle within the project areas. 3.2 Project Objectives The project's objective is to improve the livelihood of the farmers in the project areas through the establishment of integrated, demand driven and sustainable livestock (fine wool sheep, mutton sheep, and dairy cattle (only in Gansu)) production systems (including market systems). The achievement of this objective would not only lead to reduction of poverty and greater social stability in the project area, but it would also enhance food security for the province and the country as a whole.

(i) It is proposed that the project objective be achieved through an integrated approach. The main objectives are: (ii) To reduce grassland degradation through introduction of improved grassland management practices; (iii) To increase the knowledge, skills, and build capacity among herders/farmers in order to facilitate economic and environmental status in livestock/grassland production system; (iv) To improve the individual productivity and efficiency of livestock production in order to increase the herders/farmers income, but holding the number of livestock constant, or preferably decreasing; and (v) To provide opportunities for profitable value added activities, and to establish an efficient market system 3.3 Project Components In order to reach the project objectives four main project components are identified. The project components and all activities to be financed under these components are integrated, i.e. they are build on each other and generate a joint benefit that would not be achievable if the components were implemented separately from each other. A consequence of this approach is that most of the activities are closely linked to the geographical area and livestock development/management schemes. The main project components are: (i) Grassland Management Component; (ii) Livestock Production Improvement Component; (iii) Market Systems Development Component; (iv) Applied Research, Training, and Extension Component; and Project Management, Monitoring, and Evaluation Component.

20 3.3.1 Grassland Management Component The Grasslands Management Component will comprise of three sub-components:

(i) Forage and feed development; (Forage and feed development sub-component consists of annual forage of corn for silage and corn for grain, and perennial pasture that is largely consists of planting of alfalfa. However, the project recommends that where possible, herders plant a mix of oats/peas around their settlement for hay. Sunan County, Gansu, is the only county that is planning to undertake the development of semi-artificial pasture.

Conversion of degraded rangeland to artificial pasture is envisaged in a number of counties, particularly in Xinjiang that raises serious concern since national environmental regulations prohibit the conversion of rangeland or forestland to cropland and the project would not be able to support such development.

(ii) Integrated rangeland improvement; Integrated rangeland improvement sub-component consists of a number of activities: (a) rangeland planning; (b) fencing; (c) livestock drinking water development; (d) reseeding of degraded rangeland; and (e) control of rodents, grasshoppers and poisonous plants.

(iii) Grassland monitoring. The project will provide equipment and training to county grassland monitoring stations to improve their capacity to investigate and monitor rangelands and to determine stocking rate. The feasibility report also includes provision for support to county-level grassland monitoring stations, which is noteworthy, as these stations will be expected to play a major role in improving quality of grassland management in the project counties. 3.3.2 Livestock Production Improvement Component The livestock production and improvement component has five sub-components:

(i) Fine wool & mutton nuclear breeding stations; The overall objective of this sub-component will be to increase body size and increase wool quality through importation of merino rams fromAustralia and through selection within existing Chinese fine wool breeds. The principal objective of the mutton sub- component is to preserve native breeds and to make genetic improvements in the native breeds to facilitate efficient mutton production in the project counties. Additionally there are activities proposing the acquisition of foreign breeds for the use of production of commercial market lambs (non-breeding stock).

(ii) Fine wool & mutton multiplier stations; The overall objective is to increase numbers of genetically improved fine wool and mutton sheep consistent with demand by the herders.

(iii) Fine wool and mutton households; The principal objective of this activity is to increase the quality of life for herders through improved breeds, training in techniques of efficient animal production, and through better equipment and facilities. In order to realize intended benefits from genetic improvement of fine wool and mutton sheep, it is imperative that the quality and quantity of nutrition be available to meet the nutritional requirements of herder flocks.

(iv) Fattening farms;

21 The objective of this sub-component is three-fold: a) to provide opportunities for value added activities for livestock production; b) increase the off-take from pastures; and c) encourage entrepreneurial activities in animal husbandry.

(v) Dairy production. The counties involved included: Lintao, Linxia, Lingtao, Dingxi, Jiuquan and Yongchang. The Hovill dairy company will be the leading group in , while the county PMO will be the financial lead in the other five counties.

The project agrees to finance one 200-dairy cow operation under the direction of Hovill Dairy Company. It is also expected that the farm operated by Hovill Dairy Company will become a demonstration to other future dairy production operations in the project area.

Construction of collection stations will be dependent on the number of milking centers and the distribution of cows. A budget of 10 collection centers in 5 counties has been prepared, but the plan will be flexible in the event there will be a need to reallocate these investments. 3.3.3 Market Systems Development Component The market systems development component has been subdivided into three sub- components:

(i) Physical investments; The physical investments in the market systems development component include renovations, and some new construction, of livestock markets. In some cases these markets serve specific distribution or promotion purposes.

For the fine wool sector, the major physical investment under the MSD component is shearing stations. These provide shearing and wool sorting and packaging services to herders as a first step in raising the value of herders' wool

(ii) A loan program to implement risk management and boost liquidity, A program of loans is to be targeted at three significant market participants (fattening households, wool traders, and livestock traders). The loans would be for less than one year, available only at certain times of the year, and require a signed contract specifying price arrangements and timing of delivery. These contracts might refer to herders or groups of herders, or in some cases, to traders distributing branded product to new market areas. The impacts will be to reduce uncertainty associated with late-season marketing of product by herders, and to encourage the practice of pre-payrnent. A further impact will be to increase competitive pressures, with the aim of raising prices at the farm gate. In general, the loan program will start up in a limited number of initial counties, then spread to others later. The eventual adoption of such lending by private banks is one targeted outcome of this activity.

(iii) Investment in public goods and services. The public goods and services is a key part of the Component and has several parts. A detailed program has been agreed for training in Gansu, and some progress made for Xinjiang. For all except wool traders, training is to be provided free of charge in Gansu. Training to Gansu's fine wool sheep herders is to be facilitated by re-training one specialist fine wool marketing specialist extension officer who will be equipped with a vehicle and training materials. This training will focus on preparation and sale mechanisms, as well as the financial implications of breeding strategies and alternative

22 marketing channels. Training of meat sheep herders will cover similar material, but will involve re-training a selected set of extension officers,,'and the introduction of a series of training seminars supported by training materials. 3.3.4 Applied Research, Training, and Extension Component The objectives of the applied research program are to assist the development and transfer of relevant low cost technology to farmers and herders, and provide technical support during project implementation.

The training activities can be divided into various categories of activities: (i) management training (including study tours); (ii) training of trainers; and (iv) technical training (including study tours). The training sub-component is to facilitate and supply technical and management knowledge to the Grassland management and animal production systems to ensure sustainability. In general, the training activities for the project should rely on domestic resources as much as possible.

By definition, an integrated project demands strong support of technical extension and training. The project, in order to achieve its objectives is dependent on a satisfactory extension strategy and implementation of it. Technical assistance (TA) needs have been identified for a number of activities as described in the component above. It is believed that the TA activities are very suitable for joint implementation between Gansu and XUAR. 3.4 Indicators of Project Success The project success will be measures based on the following output and outcome indicators: (i) Number of grassland technicians trained in participatory approaches and sustainable grassland management; (ii) Number of community based grassland management plans that are prepared and implemented; (ii) Areas of natural pastures that has been improved using grassland yields of summer, spring/autumn, and winter pastures as indicators; (iv) Areas and yield of fodder and forage crops (Artificial pastures); (v) Weight of lambs from selected households; (vi) Establishment of nucleus breeding flocks of exotic and key domestic animals at the nucleus farms; (viii) Establishment of herd book and performance testing system, covering in commercial herders; (ix) Number of improved local and exotic stock in multiplication farms; (x) Number of fine wool and mutton sheep inscribed in the herd book; (xi) Slaughter weights of lambs and wool fineness improved; (xii) Number of genetically improved fine wool and mutton sheep at household level; (xiii) Number of shearers and wool traders trained; (xiv) Marketing information system and supporting infrastructure established; (xv) Improvement in the quality of fine wool; (xvi) Increase in production of high quality fine wool; and (xvii) The overall increase in the income of participating herders and farmers (project beneficiaries).

23 3.5 Project Area Since the proposed IPDP project covers both XUAR and Gansu, the description of the project will be divided into two separate sections to simplify further analysis of the information. 3.5.1 Gansu Province The proposed IPDP project covers 14 counties, one Group Corporation and four breeding farms that are managed by the Provincial Agricultural and Animal Husbandry Department. Hydrographically, the project counties are within the river catchment of three major river systems (, Black River, and Sule River). Table 3-1 presents the project counties, their river basins and their focus livestock production systems.

Table 3-1 project County Distribution and Pr duction System River Basin Project Counties Main Livestock Production System Black River Sunan, Huangcheng breeding farms Mainly extensive (semi-pastoral fine wool sheep) Zhangye Mainly intensive pen-fed mutton sheep Jintai breeding farrn Intensive mutton sheep breeding Yellow River Dingxi, Jingyuan, Yuzhong, Lintao Mainly intensive pen-fed dairy cattle and mutton ______sheep Linxia, Kangle, Zhuoni Mainly extensive, semi-pastoral fine wool sheep Sunan Mainly extensive, pastoral fine wool sheep Lintan Both pen-fed and semi-pastoral mutton sheep Minshan breeding farm Intensive goat breeding Hovill Dairy Company Intensive dairy cattle production and milk processing Sule River Jiuquan, Yongchang, Yongchang breeding Mainly intensive, pen-fed mutton sheep

I_Sunan Mainly extensive, pastoral fine wool sheep

3.5.2 XUAR The proposed IPDP project covers 32 counties, and three sheep breeding farms that are managed by the Agricultural and Animal Husbandry Department. Hydrographically, the project counties are within the river catchment of 12 major river systems (Tarim, Yili, Urumqi,Hutubi, Manasi, Emin, Kuitun, Coertala, Kaidu-Peacock, Aksu, Weigan, Yeerqiang, and Erqisi River systems). Table 3-2 presents the project counties, their river basins and their focus livestock production systems.

24 Table 3-2 Project County Distribution and Produciion System River Basin Project Counties Main Livestock Production System Yili River Chabuchar, Hecheng, Gongliu, Mainly extensive semi-pastoral fine Xinyuan, Zhaosu, Tekesi, wool sheep production Gongnaisi Sheep Stock Farm Urumqi River Changji City, FukangCity Mutton Sheep Hutubi River Hutubi Mutton Sheep Basin Manasi River Manasi, Shawan County Mutton Sheep Creeks and Jimushaer, Mutton Sheep streams of the eastem section of northem Tain Shan Emin River Taicheng, Emin, Yuming Fine Wool Sheep County, Taicheng Sheep Stock Farmn Kuitun River Wusu Mutton Sheep Eergisi River Altai, Fuyun, Mutton Sheep Boertala River Bole City, Wenguan County Mutton Sheep Kaidu- Yanzhe, , Mutton Sheep peacock River Bazhou Sheep Stock Farm, Kuerle Aksu River Wenshou County Mutton Sheep Weigan River Quche County and Baicheng Mutton Sheep County Yeerqiang Shache County, Maigaiti Mutton Sheep River Creeks and Tulupan Mutton Sheep streams of Tulufan Creeks and Hami Mutton Sheep streams of Hami

3.6 Project Implementation Schedule A gradually build-up process would be adopted during implementation consistent with the phased implementation approach. It is estimated'that implementation of the whole project will last about six years with about 15 to 20% of the aggregated sub-project areas would be implemented yearly during the first six years of project implementation.

Artificial pasture subcomponent activities in each area could only start when irrigation and drainage works had been completed. Natural grassland Improvement, and most extension and training activities (county and technician training, demonstration sites, activity centers, equipment purchase, and applied research) would start in the first implementation year.

This project is plamed to be implemented from the Ist quarter of 2003, and should be completed in 2009.

25 3.7 Project Investment The total project investment is estimated to be about US$ 150 million. The costs based on the proposed scales of the five main components of the project are: about US$ L million or L% of total investments for the grassland management component, some US$ L million or [,% for the livestock production improvement component, US$ CD million or about E% for the market system development component, and US$ l million or . . % for the applied research, training, and extension component. In addition, about US$ M or M% million would be made available for project management, monitoring and evaluation component.

26 4 Description of Existing Environment Gansu and XUAR are two of the 12 provinces and regions that are known as Western Region. This broad region has complex physical characteristics with a wide variation of climatic, topographic and physiographic characteristics. The major physiographic units within the Western region include mountains (49.7%),'hills (14.9%/o), mesa (1.7%), and plateau (16.6%)3. The following sections describe the major physical, ecological and socio-cultural conditions within the project area. The EA study area in Gansu covers 13 counties four breeding farms, and one dairy production company, while the EA study area in XUAR covers 32 counties, and three sheep breeding farms. Description of various features of the physical (natural), ecological and socio-economical environments are presented in the following sections. 4.1 Physical Environment, Gansu 4.1.1 Topography Gansu lies between 32° 34' and 42°49' N latitude, and 920 13' and 1080 35' E longitude. The province total land area is 454,400 km2. The project areas can be divided into three parts, the western area, middle area and southern area. A) The western area includes the Hexi Corridor and . The highland of the Hexi Corridor is the oasis cropping area and the Qilian Mountains is the grazing area. The Qilian Mountain is located to the south of the Hexi Corridor. B) The middle area includes places to the east of Yellow River and Western Loess plateau. The elevation varies between 1,000 and 3,670 meters above sea level (masl), with the highest point being Dalijia Mountain. C) The southern part of project area is on Gannan Plateau at the northeastem edge of . The elevation ranges between 2,200 and 3,600 masl that is lower than the elevation average in the Gannan Plateau proper.

Gansu Province is a land-locked province surrounded by Shannxi, Sichuan, , Inner and . The northwestern end connects with the People's Republic of Mongolia. The province is situated in a mountainous plateau where Mongolian- Xinjiang, , and Loess Plateaus join together. The western Qinling Mountains extends into the southeastern part of Gansu. Mountainous plateau covers over 66% of the province, and sandy and covers 26% of the land area. Only 3% of the land is in plains and forest covers some 7% (470,000 mu) of the landscape. Data from Grassland Resources in Gansu Province indicates that Gansu has 179,000 km2 of grassland, out of which 160,700 km2 are usable pasture. The three major river systems (Yellow, Black, and Shule) originate from the boundary mountainous land. The general slope gradient is from west to east with elevation drop from 3,000 to 1,300 masl. The higher mountainous areas with an altitude of over 4,000 masl have permanent glaciers. 4.1.2 Soil A number of different soil types are present within the province. The m,ajority of soils in southern part of Gansu belong to mountain brown earth, mountain cinnamon, and yellow brown earth soil types. In the Loess plateau majority of soils belong to yellow loessial, chernozem, sierozem and so on. In the Hexi Corridor the main soil types include brown desert soils, oasis irrigated arable soil, gray brown desert soils, castanozem, saline soils and Aeolian sandy soils. In Gannan and Qilian Shan areas the main soil types include sub-alpine meadow and alpine meadow soils with areas dominated by mountain

3Data source: Romote Sensing Investigation on Eco-environment in Western China, 2001, SEPA.

27 castanozem, mountain chemozem, cinnamon soil, brunozem, marshy soil, etc. The most fertile soils of Gansu are chemozems, oasis irrigated arable soil, mountain chemozems, mountain brunozems and cinnamon soils. Meadow soils have high organic matter content, but the rates of organic matter oxidation and release of nutrients is low, causing poor soil fertility and unavailability of plant nutrients as a result of low average annual soil temperatures. Other soils present in Gansu are generally low in organic matter content and have low fertility4. 4.1.3 Climate Gansu has three heat zones, Subtropics, warm Temperate Zone and Temperate Zone. Its climate includes moist, semiarid and arid types. A) The climate in western project area is moderate temperate arid desert type. The annual average temperature is 3-9°C The annual average temperature is 2.8-5.90°C. The frost-free season is 65-135 days. The average precipitation is 500-600mm annually.. The accumulated temperature of V°C is 2200-4000°C. That of >9°C is 2000-2900°C and 24 0°C is 1600-3600°C. The annual sun radiation dose is 5800- 6400nj/cm2 .a. The frost-free season is 130-210 days. The growing season is 230- 310 days. The average precipitation is 140-360mm annually. The elevation of the Corridor highland is between 1000m and 2600m. Controlled by the northem extreme dry climate, this area is dry and rainless but sunny. B) The annual average temperature in the middle project area is 0.3-1 1°C. The climate is arid to semi arid. The accumulated temperature of V°C is 1900-35000C. That of Mi°Cis 1600-3900°C and 100 C is 900-35000C. The annual duration of sunshine hours is 2100 hours. The frost- free season is 75-202 days. The average precipitation is 180-620mm annually. C) The climate of southem project area is humid to sub-humid. The annual average temperature is 2.8-5.90C. The frost-free season is 65-135 days. The average precipitation is 500-600mm annually.

Table 4-1 presents the "typical" climatic data for selected project counties. 4.1.4 Hydrology Surface Water: The hydrology of the province is related to three river basins: the Yellow River basin, the Yangtze River basin and the continental river basin. The main rivers in the province include the following inland rivers: the Yellow River, the , the , White Dragon River, Jing River and the Black River, Shule River, and the Stone Sheep River. If an imaginary line is drawn from the Liupan mountain to Qingling to Qilian mountain, then the surface water resources to the north of the line are scarce while the area to the south appear to have ample supply of surface water. The annual runoff in the south of the imaginary line generally ranges between 100 to 300 mm. In some of the hilly alpine land the runoff could reach to 400 to 600 mm. The water scarce area to the north of the line include eastem Gansu, central Gansu, the vast Loess Plateau and northem Lanzhou area, with an average annual runoff of only 5 to 50 mm5.

The rivers of Gansu province are characterized by uneven distribution of the river discharge over the course of the year. Generally speaking, the river discharge in spring and winter season is low, increasing in summer months and peaks in autumn. The river

4Data source: Gansu Vegitation, 1996. Water Resource White Book of Gansu Province, 1996-2001.

28 discharge of the continental river is concentrated in June through September accounting for 71 to 76% of the total annual discharge6.

The discharge of Yellow River and Jing River are concentrated in May through August, accounting for 64% of the annual discharge. The river discharge of upper Longyang Gorge and Zuli Rivers are concentrated in June through September, accounting for 66 to 84% of the annual flow. The runoff of Tao River, Malin River, and the Lanzhou part of the Yellow river is concentrated between July and October, and the discharge in the 4 months accounts for 45 to 82% of the annual total. The runoff of the White Dragon River is concentrated between July and October, and the 4-month discharge accounts for 58% of the annual total7.

Table 4-2 presents the general hydrological characteristics of the major river system within the project areas8.

6 Water Resource White Book of Gansu Province, 1996-2001.

7 Water Resource White Book of Gansu Province, 1996-2001. 8Data Sources: (1) The investigation of agricultural resources in Gansu; (2) Consulting with experts from Gansu Agriculture University.

29 Table 4-1 The Climatic Characteristics of the Project Areas in Gansu province Project Average Average Average Cumulative Frost-free Average Precip. in Precip. in Precip. in Precip. in Annual Annual Location Annual Temp., Temp., Temp., Period, Annual Spring Summer Autumn Winter Evaporation Aridity (County) Temp.,O Jan, 0 July, 0 >00] Days Precip. [mm) Ommo [Immo (mm) Omm[] Index (mm) Ding Xi 6.3 -8.0 18.4 2933.5 138 565.2 113.8 305.0 135.7 10.7 1259.8 1.41 Zhang Ye 7.0 -10.2 21.4 3388.0 147 129.0 21.0 77.9 25.4 4.7 2047.9 6.94 Jiu Quan 7.3 -9.7 21.8 3461.9 157 85.3 17.4 48.4 14.2 5.3 2148.8 11.18 Lin Xia 6.8 -7.4 18.1 3011.8 151 501.7 102.9 264.1 126.3 8.4 1298.9 1.73 Yongdeng 5.9 -9.1 18.4 2897.7 127 290.2 53.7 161.9 69.6 4.8 1879.7 20.6 Lin Tao 7.0 -7.5 18.5 3089.2 141 565.2 113.8 305.7 135.7 10.7 1259.3 1.41 Min Xian 5.7 -6.9 16.1 2597.6 124 588.2 145.7 288.3 145.1 9.1 1192.2 1.27 Su Nan 3.6 -10.4 15.9 2336.4 115 253.0 45.6 158.4 43.9 5.1 1784.6 2.64 Kang Le 6.0 -8.2 17.4 2822.7 128 564.0 115.7 306.2 129.9 12.2 1267.9 1.46 Lin Tan 3.2 -8.5 13.4 1928.3 75 520 115.9 268.9 127.1 8.1 1484.6 1.09 Zhuo Ni 4.5 -7.8 14.3 2276.4 75 578.1 121.9 331.2 115.6 9.4 1238.3 1.15 Jin Yuan 8.8 -7.7 22.6 3783.4 162 239.8 43.6 133:6 58.2 4.4 1657.1 3.72 Jing Tai 8.2 -7.7 22.0 3594.9 159 184.8 31.7 105.7 45.4 2.0 3038.5 4.97

30

Table 4-2 The Characteristics of the rivers in Gansu roject area River River Name & From - to Total Average [River length Total Annual System County River Annual in county Discharge Length Runoff (Mm3) (km) (Mm3) (km) Black Black River, 1550 River Zhangye Maying River, 116 Huangcheng- Liyan River, Qilian to Shanlinze 107.0 235 90.0 231 Southemn Gansu . . Hong Shui River, Qilian Shaan to 87.9 287 50.0 Jiuquan city Golden Pagoda Dayekou River, 14.5 _ Zhangye Shule Shule River 994 River Stone Yellow sheep Qilian Shan to 45.1 146 45.1 146 Sheep River, Liangzhou Liangzhou River Xiying River Qilian Shan to 80.0 388 80.0 379 Liangzhou Xida River, Qilian Shan to 90.0 155 90.0 155 Yongchang Yongchang Dongda River Qilian Shan to 63.4 164 63.4 311 Liangzhou, Liangzhou district Yongchang Taole River, Qilian Shan to 224.0 653 120.0 Jiuquan City, Golden Pagoda Jiayucuan City Zamu River. Qilian Shan to 95.0 259 75.0 Liangzhou City Liangzhou District Golden Pagoda 144 River, Liangzhou Yellow Daxia River, Xia River to Lintao 179.0 1140 50.0 1160 River Linxia Zuli River, 148 Jinyuan Tao River, Lintao 1850 Tao River Sunan to Jinyuan 642.3 3780 75.0 (Minxian) . Zhuanglang River .Yongdeng 190.0 212 130.0 (Yongdeng) Guancuan River Yuantou (headstream) 84.9 39.4 84.9 (Dingxi) to Chankou Ox head River Zhangjianchuan to 84.4 190 45.0 (Qingshui) Tianshui Guangtong River 356 (Lintao) Sancha River 118 (Lintao) Yangsha River 107 ___ _ _ (L intan -Zhouni)) ______

Groundwater9: The available 1999 groundwater data for Gansu province indicated that the total available groundwater resources amount to 14,755 million cubic meters (Mm3), of which, the groundwater in the continental river valley was 5,639 Mm3, in the Yellow river valley 5,298 Mm3, and in the Yangtze river valley 3,818 Mm3.

The groundwater resources of the massif area are dispersed over the Qilianshan mountainous region and southern Gansu hilly land. In Loess Plateau the groundwater is

9 Data sources: (1) All data are collected from white book of water resource in Gansu, 2001. (2) Consulting with water resource experts in Gansu.

32 very scarce. In 1999 groundwater produced in all the rnassif area of the province was 4,578 Mm3, among which, the groundwater of massif area in continental river valley was 3,063 Mm3, in the Yellow River valley 4,578 Mm3, and in the Yangtze River valley 3,807 Mm3. The places whose replenishable groundwater within massif areas is below 100 Mm3 include , Jincchang city, and city. Places whose replenishable groundwater within massif areas is between 100 Mm3 and 500 Mm3 are Lanzhou city, , Dingxi district, Tianshui city, district and district. Places whose replenishable groundwater within massif areas is between 500 Mm3 and 1,000 Mm3 is Wuwei district. Places whose replenishable groundwater within massif areas is above 1,000 Mm3 are Jiuquan district, Zhangye district! Gannanzhou and southem Gansu, standing at 1,147 MM3, 1,549 Mm3, 3,752 Mm3 and 2,459 Mm3, respectively. The net available groundwater in Gansu is 1,164 Mm3, including 543 Mm3 in Hexi Corridor, 572 Mm3 in the Yellow river valley, and 49 Mm3 in the Yangtze River valley.

The analysis, based on the groundwater observation in Hexi Corridor in recent years shows that after experiencing a drastic decrease over a certain period, and along with the water consumption in upper and middle reaches goes toistable, the groundwater level changes in the whole basin is also becoming stable: it goes up when the incoming water increase and goes down when the incoming water decrease. The annual change range is about 0.3 m3 .

In 1999 the groundwater level of basin decreased by an average 0.23m, the available groundwater decreased by 264 Mm3, and the groundwater depth starts from over 50 m in alluvial fans on the base of the mrountains and gradually decreases towards the Hexi Corridor. The groundwater level in Hi He river basin in 1999 decreased by an average of 0.05 m, the available groundwater decreased by 49 Mm3, the groundwater depth near the mountain pass was 60m and then gradually went up toward the lower reaches of the river reaching to a depth of 5 to 10 m around Zhangye City. The groundwater level of the Shule river basin decreased by an average 0.06 m according to the 1999 data. The available groundwater decreased by 193 Mm3. The groundwater depth at the Jiuquan city in the Jiuquan basin of the middle reaches of Hongshui River and Tao Lai River was around 15 m and moved up toward the upper reaches of the river'°. Table 4-3 presents the relevant groundwater water table change tendency in Gansu province.

Table 4-3 Groundwater water table c ange in Gans province region 1996 1997 '1998 1999 Lanzhou Mainly down Mainly up Mainly up Mainly up 0.01-5.58 1.94-5.58 1.75-3.11 3.32-6.63 Xifeng Down Down Down Down -1.52-6.01 0.66-1.82 -0.26-9.90 -0.40--1.29 Tianshui Mainly down Down Up and Down N/A -0.55-1.38 -0.39-1.32 +0.04/-1.1-9.00 I Data source: Reoprt of national environmental Quality within 1996 and 2000.

4.1.5 Surface Water Quality Urban Surface Water" : According to the statistical data obtained for 2000 the river reaches of the province, which attained the required standards, are Zhangye reach of Hi He (Black River), Jinchuan river in Jinchang and the Wudu reach of Bailong Jiang River. Among the 28 river reaches under observation, 12 are sub-V and 9 are V category,

'° Data Sources: Report of White Book of Water Resource in Gansu, 2001. For water quality grade, seeing environmental quality standard classfication in Chapter 1. "Data Sources: Environmental Quality Report of Gansu Province, Gansu EPB, 2001

33 accounting for 75% of the total river reaches. The main elevated environmental indicator is chemical oxygen demand (COD). In addition, total phosphor and non-ion ammoniac pollutant are somewhat elevated as well. Table 4-4 presents the water quality index of the main river systems in the project area'2.

Table 4-4 Surface water quality in the project area in Gansu Province River System River/County Year pH DO CODm. BOD NH3-N mg/l mg/A mg/l mgA

Black river Hi He river 2001 8.2 8.5 5.7 0.9 0.98-1.75 (Hi He) (Zhangye) System Maying He river (Huangcheng) 2001 8.1 9.5 1.2 0.2 0.004 Liyuan river (Sunan) 2001 8.3 8.5 7.1 0.9 0.06-1.0 Dayekou river (Zhangye) 2001 8.1 9.5 2.2 0.4 0.005 Shule River Shule river 2001 8.2 8.6 7.7 1.2 0.05-1.9 System_ Shiyang River Yellow sheepriver 2001 8.2 8.5 6.7 0.9 0.05-2.0 System (Liangzhou) Xiying rive (Liangzhou) 2001 8.3 7.7 6.5 0.8 0.06-1.5 Xida River (Yong Chang) 2001 8.2 7.9 6.9 1.0 0.05-1.2 Dongda River (Yongchang) 2001 8.3 7.9 7.1 1.1 0.05-1.1 Jinta River (Liangzhou) 2001 8.1 9.2 1.1 0.3 0.005 Yellow River Daxia River (Lin Xia) 2001 8.3 8.9 35.0 6.0 1.2 System Zuli River (Jinyuan) 2001 8.0 7.5 15.0 2.3 0.5 Tao River (Lintao) 2001 8.1 9.1 3.5 0.5 0.05 Guangtong River (Lintao) 2001 8.2 7.2 37.0 7.1 1.4 Sancha River (Lintao) 2001 8.1 9.0 4.5 0.7 0.06 _Yangsha River (Lintan, Zhuoni) 2001 8.1 9.5 2.2 0.4 0.04

4.1.6 Groundwater Quality Urban groundwater' 3: The year 2000 statistical data, obtained for groundwater water quality in 5 cities of Gansu province indicates that the groundwater quality in Dingxi county is quite poor. The main pollutants exceeding the standards are ammonia nitrogen, nitrate nitrogen, sulphate and fluoride. The main source of pollutants is believed to be the natural geological formations within the area. The groundwater quality of Jinchang, Wudu and Wuwei is quite well. The quality of groundwater in Jiuquan is superior.

Due to limited accessibility of pertinent water quality data within the project countries, a more general review of available water quality data based on different river basins are presented in this section. In 2001, the quality of groundwater in He Hi (Black River) basin in the area to the north of Zhangye City was reported to be close to Grade III, with Cl compound being around 237 mg/I, and total soluble solid about 980mg/i. The 2001 water quality statistics indicates that the mineralization of Shule River basin in Yumen section was around 780mg/i, with Cl compound being around 200 mg/I. Mineralization of groundwater in Anxi was 1,175 mg/l classifying it-as Grade HI for irrigation. The quality of groundwater in Shiyou River Basin to the north of Jiayuguan was also classified as Grade HI. No details of water quality data was availed to the EA team due to limited availability of relevant data for review.

In 2001, the quality of groundwater in Shiyang River (Stone Sheep River) in the section to the north of Wuwei City has been deteriorating. The maximum mineralization was found in Mingqing section, which was in the 10,000 to 30,000 mg/I, making it Grade V+.

12 Data Sources: Monitoring data from Gansu water resource station in 2001. '3 Data Sources: Environmental Quality Report in Gansu Province, 2001.

34 In Daxi River basin, within the section downstream of Linxia, the groundwater quality is classified as Grade IV. Groundwater quality in Tao River basin was mostly Grade 11, while in Zhuli River basin, the quality of groundwater was worse, belonging to between Grade III and V. Quality of groundwater in Wanchuan River Basin was Grade 11 to III, while in the lower reaches it degrtaded to Grade IV to V. Quality of groundwater in Jingtai area is mainly worse than Grade III, an in a number locations degrade to Grade V. 4.1.7 Atmospheric Environment Urban atmospheric environrment14: In the year 2000 the annual average value of urban sulfur dioxide in the whole province is 0.046 mg/ and the annual average value of nitrogen dioxide is 0.026 mg/ m3 , all of which reach the state 2d level. In 2000 there were 10 cities whose average annual value of sulfur dioxide'reached the state 2nd level, accounting for 76.9%. As for the project counties are concemed, the total suspended particulate matter in Dingxi and Linxia cities exceeded the state 3rd level. The value of both sulfur dioxide and total suspended particulate matter in Zhangye all exceeded the state 3d level. The total suspended particulate matter in Jiuquan exceeded state 2nd level.

All the project areas are located in the country or pasturing area, where the atmospheric environment quality meets the 2nd level instituted by the state. 4.2 Ecological Environment, Gansu 4.2.1 Flora Most of the vegetation of Gansu province belongs to cool-temperate region apart from the southern tip of the province that could be classified as sub-tropical. The vegetation in Southern Gansu province is temperate forest and that in the north are temperate grassland and temperate desert.

In terms of plants, 3867 species, 993 genus and 203 families of plants are identified in Gansu.

According to the ecosystems classification of China, there are four plant community ecosystem in Gansu; Forest ecosystem, semiarid ecosystem, desert ecosystem and artificial ecosystem.

There are 1044 kinds of vegetation in the frigid coniferous ecosystem in the northern side of eastern Qilian Shan (mountain), belonging to 399 genus/84 families with 48 kinds of arbor, 145 kinds of bush and 85 kinds of herbage. There are 457,800 ha of forestland, of which 129,000 ha are forestlands, 32,500 ha are scattered woodland and 293,900 ha are brush field. Grassland covers an area of about 1,660,000 ha. 4.2.2 Fauna Gansu is the one of the riches provinces in China in terms of biodiversity. There are 872 kinds of vertebrate (169 kinds of mammal, 495 kinds of birds, 67 kinds of reptile, 32 kinds of amphibian, and 109 kinds of fish). There are 6000 species in 12 phyla of invertebrate of which, 4000 species and 28 orders are insects

14 Data Sources: Environmental Quality Report in Gansu Province, 2001. For classification of level refer to the definitions presented in Chapter 1.

35 Most of the animal communities within the frigid coniferous ecosystem of Qilian Mountain are terrestrial wild animal, of which 47 kinds are beasts, 169 are birds, 13 are amphibious reptiles, totaling 229 species. The main species with latin name can be found in appendix. 4.2.3 Nature reserves In order to protect the flora and fauna biodiversity in the province, Gansu has successively instituted a number of measure, bylaws and ordinances, such as "the measures for implementing the Wild Animal Protection, the Management Ordinance for Gansu Provincial Nature Reserves, the Management Ordinances for Wild Animal Protection in Gannan Tibetan , the management ordinance for Qilian Shan National Priority Reserve, and the management ordinance for Bai Shui River (White Water River) reserve.

So far 36 nature reserves of various significance levels have been established in Gansu province, covering an area of 5,048,700 ha, which accounts for 11.1 % of the provincial total area. Among these preservation zones, five are at the national level, 27 are at provincial level, one is at district level and three are at the county (city) level. In addition, there are 37 forest parks in Gansu province, totaling an area of 259,700 ha, of which six are at state level, and 31 at provincial level. Furthermore, three nature reserves for wild animal migration and three nature reverses for wild plant migration were established respectively. Table 4-5 presents the characteristics of major nature reserves in the project counties.

36 Table 4-5 Important nature reserves related to the project counties Name of Project county Area of the Items preserved Remarks Reserve Nature Reserve

Qilian Shan Wuwei, Area of Gymnocar pos 1044 kinds of plants were collected Sub-frigid Jiuquan, preservation pnewalskii from the zone. Vertebrate: 229. coniferous Yongdeng, zone (5.5292 -1 " grade protection Beasts: 47. Birds: 169. Amphibian forest Zhangye, ha) Hunting plant decided by reptile: 13. preservation Yongchang prohibited ChinaEu zone, decided area: Not only protected the animal and by the State. 87,116 Ha plants in the zone, but also protected the water source of Hexi corridor. Da Tong river and Zhuang Lang river of Yellow river system, Shi Yang river, Hei He river and some anabranch of Shu Le river belonging to inland water system, all rise from this zone. Qing Hai Jing Tai county 10,000 ha Spruce forest in Qing Of certain importance in protecting Dragon Hai the forest in the arid area. In the Spruce (Picea proected areas, there are many asperata) endangered plants, 14 species of preservation endanged animals, 20 kiinds of birds, in Shou Lu 3 repitiles. There are many national I' mountain and and 2nd protection plants and animals. Chang Ling mountain I Dong Da Zhang Ye 5 km2 PlantOQing Hai Picea Of particular importance in study the Shan Forest, County asperata; ecosystem of desert area. In the Hilly Prairie protected areas, there 98 plant species, & Rare Animal: Panthera 20 animals, 80 species of birds. There Animal uncia, Pseudois are many national I" and 2d Reserve nayaur protection plants and animals. Guozhagou Zhuo Ni 2500 Ha National 2 protection It has important significance to the Purplecone plant: Purplecone protection of endangered fauna and Spruce (Picea Spruce (Picea flora. purpurea) purpurea) Reserve Lianhua Kangle, Zhouni, 126 km National 2nd protection In the reserve, there are 75 species of Mountain Lintan plant: Purplecone plants, 60 animals, 150 birds, 10 Nature Spruce (Picea reptile. There are many national I" Reserve purpurea) and snow and 2"d protection fauna and flora. It leopard. is not only a nature reserve, but also a famous tourist destination.

4.2.4 Soil Erosion and Water and Soil Conservation Soil erosion can be divided into two categories. One is water erosion and another is wind erosion. There are about 0.1 8million km2 of water erosion land in Gansu and the total erosion soil is about 0.6 billion tons. The area of wind erosion is about 0.3 million km2 mainly in dry desert region. The Yellow reiver basin is main water erosin region in Gansu. With project area in Yellow river basin water erosion modulus is 4000- 9000tons/km. In project areas there are big challenge for water and soil conservation. 4.3 Socio-cultural Environment, Gansu 4.3.1 Population The year 2000 statistical data indicate that the total population of Gansu province is 25,425,8000, of which, 20,211,000 (79.49%) live in rural areas. Most of the people are of Han nationality accounting for about 90.6%. The minorities accounting for 9.4% are Hui, Tibetan, Mongol, Tunghsiang, Tu, Yugar, Bonan, Manchu, Salar and Kazakh. People

37 engaged in animal husbandry are mainly Tibetan (living in the four counties of Maqu, Luqu, Xia He, Tianzhu), Mongol (Subei stock raising county), Yugu (Sunan county) and Kazakh (Akesai county). Other nationalities are of very small population and they live with Han nationality, engaging in agriculture. Table 4-6 presents the population data for the project counties in Gansu.

Table 4-7 The population of the roect coun in Gasu province Project location Total Village, Administrative Village Total Agricultural Farner Area Town village groups Population Population household (km') (1,000) (1,000) (1,000) Jiuquan city 3470.00 19 146 1350 350.0 190.0 59.0 Sunan 23887 24 97 35.9 23.4 6.0 Wuwei 270.0 Yongchang 7493 10 111 902 249.0 186.4 46.9 Zhangye 4254.33 22 243 479.3 345.6 364.3 16 152 1618 237.4 225.0 Dingxi county 3639 26 306 2301 466.8 386.5 88.2 Jinyuan 5809.4 21 183 1149 465.0 428.0 Lintao Qingshui countv 295.9 Lintan 1438.05 146.0 134.0 30.0 Zhuoni 5100 17 98 449 100.0 93.0 Huangcheng 132.00 1.36 0.36 Yongchang sheep fann 17.00 0.03 Huangcheng sheep farm Minxian horse fan h Total . 55239.8 155 1336 7769 3461.0 2012.3 230.1

4.3.2 Cultural Background Ever since the ancient time Gansu has been a place where many nationalities live with the Han nationality. At present 44 nationalities live in Gansu. The 10 nationalities with a population of over 1,000 are Hui, Tibetan, Tungsiangh, Tu, Manchu, Yugu, Bonan, Mongol, Salar and Kazakh. Total of 6 minority counties are within the proposed project, including two counties inhabited by Hui mninority, three counties inhabited by Tibetan minority and one Yugu rninority inhabited county. One Tunghsiang minority inhabited village in Kangle County and one Mongol minority inhabited village in Sunan County are in the project area. Four counties/cities within the proposed project have the Han nationality as the dominant nationality.

Most of the Hui minority people of Gansu province inhabit in Linxia Hui Autonomous Prefecture and Zhangjia Chuan Hui Autonomous County, accounting for 66.18% of the total Hui minority population of Gansu province. Other 33. 40% of Hui minority are living in Lanzhou, Pingliang, and Dingxi counties. People of Zang (Tibetan) minority inhabit in Gannan Zang Autonomous Prefecture and Tianzhu Zang Autonomous County. Tunghsiang, Bonan and Salar minorities inhabit in Linxia Hui Autonomous Prefecture. Yugu, Mongol and Kazakh minorities live in the central and western parts of Qilian Mountain within Hexi Corridor.

38 Among the minorities of the province, Hui and Manchu minority people commonly use the Mandarin language. Other minorities use their own languages as well as the Mandarin language. Between the national minorities of Gansu, the Zang, Mongol and Kazakh have also developed their own writing style. The Zang, Yugu, Mongol and Tu minorities believe , while Hui, Bonan, Tunghsiang, Salar and Kazakh minorities believe in Islam. The religious believes play an important role in the daily life of most minority nationalities. 4.3.3 Public Health In Gansu project areas there are no evident epidemic diseases. Yet in the dry farming area in central Gansu disease resulting from lack of iodine is slightly observed. 4.3.4 Cultural Heritage Cultural heritages include: Jiayuguan Pass of the Great Wall, Frescos, Quanhu Lake, Giant Buddha Temple, Muta Temple, Yixuan (offspring of ancient Romans), Haizhang Temple, Leitai Temple, Huangtai Temple and Lianhua Temple and so on. 4.3.5 Scenic Spots and Tourism There are abundant tourism resources in the project areas of Gansu, which are mainly concentrated in Hexi Corridor. Linxia County has long history with rich cultural relics of Majiayao. Since Qing and Han dynasties, Gansu had been an important passageway of the and had been influenced by many cultures.

Some of the major scenic and tourist spots include , Binlingshi Grotto, Hongyuan, East Palace, Nanguan Muslim Mosque, Lianhuashan Mountain, and Pine Tree Sound Rock. Linxia County is an area mainly inhabited by Muslim population with Muslim culture and unique Muslim traditions and customs. In this county, many tourist activities centered around Islamic culture and traditions are developed. Linxi County, also known as the hometown of "Flowers", is well known for brick craving and floral arts.

The ancient name for Zhangye City was Ganzhou, a well-known historical and cultural city identified as cultural heritage at the national level. Famous cultural relics in this city include Giant Buddha Temple, Muta Temple, Horse Foot Grotto of Sunan County, Kanglong Temple Game of Sunan, Shandan Military Horse Farm, and Xinheyi Great Wall of the .

Jiuquan has long history with well-developed culture. There are seven ancient grottoes and two of them, Mogao Grotto and Yulin Grotto, are well preserved. There are 27 City Wall relics of Denghuang Ancient City, Qiaowan Ancient City and Shouyang City. There are also 13 well-protected sections of Great Wall and 100 beacon-fire fortresses that were built during the reign of . There are over 30 spots of ancient temples. In Jiuquan Temple and Denghuang Temple, there are mnany frescos and brick tombs of Han, Wei, Jin and Tang dynasties.

Jiayuguan Pass is an important tourism city along the ancient Silk Road. Tourism resources include City Wall of Jiayuguan Pass, Fresco Tomb of Wei and Jin dynasties in Xincheng, the first beacon-fire fortress of the Great Wall, Suspending Great Wall, Great Wall Museum and Painting on the Rock in Heshan Mountain.

Tourism resources in Dingxi County include Majiayao Culture, Siwa Culture and Xindian Cultural relics. There are also relics of the Great Wall built during the Worrier States. In

39 Zhangxian County, there are Guiqingshan Mountain, Zeyangshan Mountain, Weiyuanlianfengshan Mountain, Gorge, Shouyangshan Mountain, Baling Bridge and Longxitang. 4.3.6 Infrastructure The construction of infrastructure has been developing rapidly. By 1998, there were 1,965.8 kilometers of railway and 360,000 kilometers of roads in the whole province. A total of 2,570 kilometers of the roads are classified as second grade road or better, and 25,000 kilometers of high-grade roads. In the whole province, 99.8% of the townships are accessible by roads and 82.5% of administrative villages are accessible by automobiles. There are three airports in the province, Zhongchaun (Lanzhou), Denguang and Jiayuguan. By 1999, over 36% of administrative villages had telephone connection. The number of customers of cellular phone has reached 134,000 and there are 10,700 users of the Internet service. 4.3.7 Land Tenure and Land Ownership Almost all the grassland in the project areas has been contracted out to farmer households on a 30-year lease basis. All arable lands are also contracted to farmer households on the same lease agreement basis. It is hoped that land use rights improvement will provide additional incentives and positive impact on initiation of grassland protection activities. 4.3.8 Land Use and Farming/herding Practices The status of land use in Gansu is listed in table 4-7. The area of arable land accounts for 7.55% of the total land areas of the province that is lower than the national average of 14.15%. Per capita arable land area in Gansu is 0.13 hectare. The basic features of the arable land in the whole province are as follows: arable land area on mountain slope is greater than that in the flat and valley areas; upland is more than paddy fields. The irrigated land including paddy fields and land used for vegetable production accounts for 19.72% of the total arable land area of the province that is less than half of the national average of 42.55%. Since over 2/3 of the arable land in the province is on slopes, the agricultural production condition is rather poor. About 6.07% of the total arable land is on slopes of greater than 25 degrees and by the decrees of the State Govemment should be retumed back to their original state, i.e., natural grassland. The majority of farmlands in the province have low soil fertility status with low productivity. The steady increase in population pressure, combined with insufficient arable land resources, the per capita arable land availability is gradually decreasing.

Table 4-7 Land Use Status in Gansu Province Arable Forest Grassland Water urface Urban area and land usedby Unutilized Total land land | area I public transportation land KM. 536.2 390.7 1397.6 38.2 1 112.7 1570.5 1 4045.9

The total land area in the 14 project counties is 111.705 million mu or 7.5 million hectares (M.ha) that is about 16.4% of the national total. The total arable land area within project counties is 18.707 million mu (1.25 M.ha), orchards covers 74,000 mu (4,933 ha), forest area covers 11.716 million mu (781,000 ha), natural grassland covers 62,142 million mu (4142 M.ha), and the unsuitable land area for crop production cover 15.271 million mu (1.02 M.ha). The land use status in the project areas is summarized in the table 4-8, while the types and area grassland in Gansu Province is listed in table 4-9.

40 Table 4-8 Land Use Status In the Prect Counties in Gansu Province Project Arable Orchard Forest Grassland Urban Factories Transport Water Unusable county land Land areas or mines bodies land area M.ha Jiuquan City 61.93 0.47 2.00 26.20 7.33 0.33 2.67 14.07 229.33 Sunan 6.73 0.00 180.07 1,286.67 2.67 2.33 2.00 8.60 725.73 Wuwei 123.53 0.93 10.93 92.27 12.00 0.00 7.00 27.40 232.80 Yongchang 89.60 0.13 36.93 307.60 12.60 0.33 4.47 6.27 198.67 Zhangye 77.20 1.60 14.33 133.47 6.53 0.40 3.80 12.07 118.67 Linxia 49.60 0.13 28.40 24.73 4.00 0.02 0.80 3.40 10.20 Kangle 38.80 0.00 35.60 21.13 2.80 0.00 1.13 1.60 6.93 Dingxi 206.53 0.46 21.20 72.53 16.33 .0.02 7.67 3.60 30.00 Jingyuan 181.93 0.73 7.80 525.80 12.60 2.80 6.87 6.93 16.20 Lintao 136.53 0.27 16.40 100.33 5.33 0.00 4.47 5.80 16.33 Qingshui 99.80 1.40 32.60 47.20 3.93 0.07 3.87 8.40 1.27 Lintan 28.07 0.00 28.27 81.93 2.33 0.00 1.20 0.53 1.20 Zhuoni 21.87 0.00 164.00 316.33 1.73 0.00 2.67 3.00 6.40

Table 4-9 Types and Area of Grassland in Gansu Province Grassland Grassland Type Total area Percentage of the Area used (kmn2) Percentage of the Group (krn2) total grass land area total used land area of Gansu Shrub Warm temperate low 262,869 1.47 219,793 1.27 density Warm temperate with 173,933 0.97 152,230 0.95 shrub Warm grassland 487,06 2.7 419,083 2.61 Steppe Meadow Grassland 773,009 4.3 681,120 4.24 Temperate Grassland 2,595,786 14.5 2,404,925 14.96 Temperate Deset 1,049,798 5.86 919,002 5.72 Desert Cool Temperate 703,710 3.93 587,189 3.65 Warm Temperate 4,705,994 26.28 3,852,731 23.96 Alpine Desert 18 927 0.11 14,559 0.09 Alpine 1,479,716 8.26 1,401,508 8.72 Meadows Alpine 664.648 3.71 640,840 3.99 Alpine Shrub 4,317,111 24.11 4,131,786 25.71 Wetland Meadow 643,900 3.6 621,313 3.87

_ Marshland 27,650 0.15 25,529 0.16 Total. I _ _ 17,904,147 99.95 1,6071,608 99.9

Among different grassland types in the project areas, the area of meadow grassland is the largest and most widely distributed. The average annual total output of fresh grass is 3.305 million tons (excluding shrub meadow grassland). The theoretical carrying capacity for grazing can reach 1.32 million sheep units. The yield of grass varies according to the type of grassland. The average fresh grass yield per mu of natural grassland is 173.25 kg, ranging from 47-74 kg for deserted grasslands to 60.01-222.3 kg for steppes and 161.89- 462.96 kg for alpine meadow grasslands. In order to upgrade the productivity, local governments in recent years have implemented various measures to improve natural

41 grassland quality through reseeding, fertilizer application, irrigation, rodent control and weeding and have undertaken integrated grassland management. At present, the natural grassland area under integrated management in the project areas has reached 12.165 million mu. For example, the grass output in the natural grasslands of Huangcheng Nucleus Sheep Breeding Farm in Gansu, has increased from 185 kg/mu in 1989 to 287 kg/mu in 1990 after the implementation of integrated management measures. In order to regulate the grass production season and to alleviate the pressure of grazing on natural grassland, large areas of artificial grassland have also been established with the assistance of research institutions and technological extension departments in project counties. Through such activities, area of perennial grasses (mainly alfalfa) has reached 90,000 mu. The area of annual grasses (mainly oat, rye and pea) has reached 390,000 mu. Annual grass covers a large proportion in agricultural areas, and it is usually intercropped with other crops.

The details of grassland resources of project counties in Gansu/farms are listed in Table 4-10, while grassland types and balance sheet of grassland and livestock of the project areas is shown in tables 4-11 and 4-12, respectively.

Table 4-10 Status of Grassland Resources in Project Counties in Gansu Project area Total Arable land |Amble land,>25° slope Grassland Area Usable Area

(mu) (M.ha) Jiu uan City 620.000 50,000 8.3 4.7 Sunan 54,600 0 151.3 139.6 Wuwei N/A N/A N/A N/A Yongchang 1,300,000 N/A 22.8 22.8 Zhangye 686,200 N/A 20.3 13.3 Linxia 613,559 10,900 N/A N/A Kangle 504,862 74,701 4.45 4. 5 Dingxi 2,252,800 168,253 13.9 13.3 Jingyuan 1,121,200 461,600 29.3 22.2 Lintao N/A N/A N/A N/A Qingshui County 1,280,249 48,393 2.8 2.8 Lintan 255,000 7,633 8.3 8.3 Zuoni 170.000 N/A 32.2 32.2 Huangcheng 15,000 N/A 1.3 1.0 Yongchang N/A N/A Sheep Farm 0.2 0.2 Huangcheng N/A N/A 1.0 N/A Sheep FarmT Mingxia Horse N/A N/A 5.71 N/A Farm______Total 8,873,470 821,480 293.4 264.8

42 Table 4-11 Pro ect County/Farm In Gansu Project County Meadow Shrub Meadow Low land Meadow Steppe Desert Steppe Marsh Total Gross Area Ratio Available of Gmrassland Grassland Area Grass Yield Area Grass Yield Area Grass Yield Area Grass Area Grass Area Grass Yield Yield Yield ha Tons ha tons ha tons ha tons ha tons ha tons ha % Sunan 37259 120719 127020 613507 31838 2388 466441 61104 118336 205905 1396807 1512600 0.49726 Huangcheng 9933 17512 9933 13200 0.00354 Zhuoni 201295 905828 110676 608718 2415 5941 320267 332267 0.11401 Yongchang 32521 123580 13468 32323 14454 18790 127455 180986 35806 62302 228000 463333 0.08117 Kangle 24130 72390 4237 13537 11750 12690 44500 44500 0.01584 Lintan 36547 174658 12013 60906 2593 5964 51127 82000 0.0182

Wuwei 3691 12513 1292i - 7190 - 16148 25352 66345 112123 = - 92273 -105454 0.03285 Jiuquan 20600 67980 17873 106166 5847 20172 7795 10640 47067 80000 0.01676 Linxia 1265 3226 18667 56561 4340 46871 37153 37153 0.01323 Zhangye 1075 2580 4441 17053 1576 4633 30421 45632 1276 3828 133467 203200 0.04751 Dingxi 69986 164467 2538 4187.7 88687 132907 0.03157 Jingyuan 9464 51106 15774 51108 46270 90227 114625 166206 293067 293067 0.10433 Lintao 0 833 23321 90147 306500 66667 100200 0.02373 Total 363081 1519486 314950 1475073 69898 151587 844968 882723 375866 606996 1276 3828 2809015 3399881 I Total Dry 434139 421450 _ 43311 294241 202332 957 .

43 Table 4-12 Balance Sheet of Grass and Livestock in Gansu Pro ect Areas rass Yield, rass Yield, Natural atural Theoretical IActual rtificial rtificial Usable otal grass Theoretical |Actual County Name Grassland rasslad_I Caaacitv Capacity Grassland Pasture Amount Stems ersCapacity |Capacity Shortag. ha Fresh Dry 1,000 Sheep Unit ha 1000 metric tons 1,000 Sheep Unit Sunan 1,396,00 1,40 40 80 63 1,44 16,278,80( 3,30 10,30 427,00 85 77 3 7. Zhuoni 321,501 1,231 351 70: 69( 1,333 6,503,80( 1,30( 30,00( 388,001 774 91 -7 -13.'

Lintan 82,50 41f 119 23 .11 2,200 13,721,101 2,70 53,80( _ 187,00 37 292 41 8.1

Yongchang 228,00( 22; 74 14 25( 4,433 32,374,50 6,50( 300,00 ____ 407,00( 81: 65! 71 15.9 Linxia 33,553 13t 3A 71 3,17: 15,050,20( 3,001 100,00 152,001 30 351 -2 -5.

Lintao 63,12( 13 31 7 7 3,201 34,800,00( 7,001 400,00( . _ 473,001 94 511 21 43.1 Kangle 44,501 154 4; 84 301 6,38( 36,550,00( 7,301 235,001 123,001 437,00 . 873 371 25 50. liuquan 82,66t 26 8 6 12,93 12,933,30( 2,60 370,00 180,00 647,00 1,29 95 17 34. Zhangye 133,401 12 4 8 341 26,66, 23,00( 4,601 100,00 142,00( 283 14. 28. Wuwei 92,27: 10 34 5 842 10,141 11,808,00( 2,40( 1,000,00( 25,00. 1,072,00t 2,144 1,89 12: 24.1 lingyuan 221,96( 361 12( 24 302 33, 2,360,00( 501 110,00( I 233,001 465 42 2: 4.

Dingxi 132,90 25 8( 172 685 ( 108,080,20( 21,601 150,001 _ 344,00( 681 68 1 0. Qngshui 28,46 9 2 4 5 12,66 117,999,80( 23,601 400,00 543,00( 1,08 361 36 72. angcheng 9,931 21 13 30 801 1,200,00( 201 2,50t 701 11,001 2: 31 4 -0.'

ShenFarm 1,70 I 2 20 -3,000,00( 601 0. 0. 4001 I 0. ingtai Stock

arm ______I______

Stock Far 57,131 34 9 19 26 1,600,20 30 2,40 102,001 2I 9 18. rotal 2,929,621 5,26 1,565 3,00 4,24 86,17 414,282,9 87,5 3,264,00 328,70 5,567,00 11,13 8,24 1,44 289.

44

43.9 Other Employment/Manufacturing Opportunities Gansu is an economically less developed province located in the western part of the country (Western Region). The GDP of Gansu accounted for only 1.09% of the national total in 1999. The per capita net income of farmers in 1998 was 1,393.05 RMB Yuan, which was 64.63% of the national average of per capita farmers income. For a number of years, the net per capita income of farmers in Gansu Province has been ranked the lowest in the country. In 1999, the total agricultural output value was 12,818.7 million RM1B Yuan, of which the total output value of livestock sector was 4,027.73 million RMB Yuan accounted for 31.42% of the total agricultural output value. In general, the employment opportunities outside farming and livestock development in the project areas are rather sCRAES. 4.3.10 Socio-economic Development Plan During the "tenth five-year plan", the major objectives of economic and social development in Gansu Province are to maintain sustained and high speed development of national economy, to strive for GDP growth rate greater than the national average, to further optimize the economic structure, to significantly improve the quality of economic growth, to maintain coordinated growth in financial revenue and economic development to lay a solid foundation to double the GDP in 10 years (by the year 2010). The construction of infrastructure will meet the demands of social and economic development, and to achieve tangible progress in ecological environment improvement. It is to accelerate the pace of system renovation and to better improve the market economic system. According to the tenth five-year plan, the level of urbanization and industrialization will be greatly improved and process of information system development will be accelerated. It is further planned to improve employment opportunities while maintaining sustainable growth of income of citizens both in urban and rural areas. Education will be further developed and the capacity of science and technology will be strengthened. It is to achieve significant results in both socialist spiritual civilization and democratic legislation development so as to ensure all round development of the social sector. 4.4 Physical Environment, XUAR 4.4.1 Topography XUAR is located in the hinterland of Euro-Asia Continent and in the Northwestern Frontier of China. Its total land area is 1.6686 M.k1m 2 accounting for 1/6 of the national total land area. It is the biggest province (autonomous region) in China. Among the total land areas, mountainous areas (including hilly areas and plateau) take up 806,000 km2 accounting for 48.55%; plain area (including two basins and basins in mountains) 854,000 km2 accounting for 51.45%. In the plain areas, sandy desert takes up 430,000 km2 Gobi desert 320,000 km2, alluvial fans at the foot of mountains (Bajadas), alkaline shoal, meadows and oasis 405,000 km2, water surface area 80,000 km2. The major natural features of the project areas are presented in Table 4-13).

46 Table 4-13 TopoRraphic features of XUAR Rtgion Temperate desert of northern XUAR - Mountainous' Temperate desert of southern XUAR -Mountainous steppe steppe Latitudes 4349°N 34430N Mountains in the north and west are low, allowing Mountains in the south and west are high that humid air mass to pass the mountains. There are prevents humid air mass to enter. There is Mountaimany basins in the mountains in the westem part. In development of O O. Low mountains are very steep. It the central region there are developments of 3 , strongly influenced by the basin desert climate. which prevents the development desert climate to some degrees. The average latitude is less than 600 meters, the The average latitude is 1,000 meters above sea level Basin Basin tilts westward. The lowest point is 189 meters and Basin tilts eastward. The lowest point is 780 above sea level. It a semi-closed basin. meters. It is a closed basin.

Northem XUAR can be divided into seven zones: the northern slope of Tianshan, the southern slope of Altai, Taie Basin, Yili Valley, Bole Valley, Yiwubalishen Basin, and Zhungeer Desert. Southern XUAR can also be into seven zones: Tarim River Basin, the southem slope of Tianshan. Takelarnagan Desert, the northem slope of Kunlun Mountain (Hetian, Kashgar), Pamier Plateau, Alkin Mountain and Tuha Basin.

There are 32 project counties in XUAR, which are distributed in Southem, Northem and Eastem XUAR, mainly on the northem slope of Tianshan, the Southem slope of Altai, Tae Basin, Yili Valley, Bole Valley, Tarim River reaches, the southem slope of Tian Shan Mountain, the northern slope of Kunlun Mountain, (Kashgar) and Tuha Basin. 4.4.2 Soils Due to the large size of the region and differences in climate, topography and geology, many soil types are present in XUAR. In the high mountains with permanent glaciers and within humid and cold areas, moor soils are dominant. In arid and cold regions, high alpine soils prevail, while in the sub-alpine zone of high mountains and humid mountainous area mountain meadow soils are prominent. The main soil types in arid areas are mountain steppe meadow soils, while in forestlzone and cold , gray forest soils and mountain black soils are dominant. On the warm northem slope of Tianshan, they are mainly brown forest soils, mountain black soils, and mountain chestnut soils. The dominant soil types in the mountainous steppes are chestnut soils and desert steppe chestnut soils. In semi desert low hilly areas and in the basins in mountains, soils are mainly classified as gray calcareous soils. In alluvial fans (Bajadas) and in the pristine desert of southem XUAR, the main soils found are the pristine desert soils. In northem XUAR the soils are mainly the gray brown desert soils, while in the dried riverbed, they are takyr soils. On the flooded riverbanks and low land, the dominant soil type is the meadow soils. In marshlands and lake areas, the main soil types are the bog soils. In the alluvial plain, the soils are classified as desert saline soils. The characteristics of soils in the plain and mountains of the project areas are summarized in table 4-14, while their distribution is presented in Figur 4-2.

Table 4-14 Characteristics of Soil in the Plain and Mountainous Areas of XUAR Temperate desert of northem XUAR - Mountainous Temperate desert of southern XUAR - Region steppe Mountainous steppe Brown Calcareous Soils, Gray Calcareous Soils Brown Desert Soils, Gypsiferous Brown Plain (Yili), Desert Gray Calcareous Soils, and Gray Desert Soils, Typical Saline Soils. Brown Desert Soils. Desen______Typcal_Salie_Soils High Alpine Meadow Soils, Gray Brown Forest MountiSoils, Black Calcareous Forest Soils, Mountain High Alpme Meadow Soils, Mountain Mountain Black Calcareous Soils, Mountain Chestnut Soils, Chestnut Soils, Mountain Brown IMountain Brown Calcareous Soils. Calcareous Soils.

47 , -~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~N

Fig. 42 Soil types in Xiniang

48

4.4.3 Climate The climate in XUAR is a typical continental system with sufficient sunshine. The annual sunshine hours is averaged about 2,600 to 3,400 hours. The total solar energy radiation is 4,300 to 6,400X1012 Joule/M2. (Lao Fa, is this Correct? ZB) The cumulative temperature (greater and equal to 10°C) is 2,000 to 3,000°C in the northern XUAR, and 3,500 to 5,000°C in southern XUAR. The frost free period in 150 to 180 days in northern XUAR, and 190 to 220 days in southern XUAR. The difference of daily temperatures in XUAR is 12°C while the maximum can reach 35.8°C. Precipitation is small with annual average rainfall of 145 mm, which is about 23% of the national total. Evapotranspiration is extremely high and it is 10 times greater than precipitation. XUAR is a typical desert oasis agricultural ecological zone with rich solar and thermal resources, long frost-free period, conducive of development of agriculture and livestock industries. The climatic characteristics of the major project areas in XUAR are shown in table 4-15.

Table 4-15 Climate Characteristics of Maior Project Areas in XUAR Project County Meteorological Annual Annual Annual Maximum Frost Free Drought Average Sunshine Station aveage precipitation evaporation Snow depth Period Index Velocity (hour) temperature (mm) (mm) (cm) (Days)

Hami Hami 5.7 278 1914 48 182 56.1 2.9 3350? Changjii City Changji 6.1 182 1748 39 155 7.6 3.3 3076 Qitai County Qitai 4.7 176 2160 42 155 7.6 3.3 3076 Zhaosu Zhaosu 2.9 512 1260 63 97 2.0 2.5 2699 Tekesi Tekesi 5.3 383 1457 36 184 2.0 2.0 2732 Xinyuan Xinyuan 3.1 480 1286 67 150 2.0 2.1 2694 Gongliu Gongliu 7.4 257 1423 41 15 3.0 2.1 2732 Altai City Altai 4.0 181 1812 72 151 6.0 2.7 2963 Fuyun 1.8 159 1693 54 110 6.4 1.8 2865 Fuhai County Fuhai 3.4 113 1844 28 152 9.8 3.0 2890 Tacheng City Tacheng 7.0 246 1605 51 148 3.5 2.2 2922 Eming County Eming 6.3 259 1295 55 145 N/A 2.4 N/A Yuming Yuming 7.91 255 1364 49 129 N/A 2.3 2854

Bole City Bole 5.5 182 1559 28 168 4.9 3.6 2900 Wenquan . Angeli 3.6 204 1555 34 154 2.6 2.7 2868 County ______Kuerle Bazhou 11.4 51 1597 21 203 29.8 2.8 2977 Hejing County Bayingbruk -4.6 270 675 26 2.5 2.6 2832 WCnshu Wenshu 10.1 65 1884 5 173 18.2 1.6 2800 C ounty______Kashgar Kashgar 11.6 62 2607 46 219 21.0 2.0 2784 Tulufan Tulufan 13.9 17 2845 17 224 N/A 1.7 3056 Data source: Consulting with experts from the Meteorology bureaus.

4.4A Hydrology General Description of Hydrology of XUAR There are many rivers in XUAR. The number of small and big rivers totals 570, and volume of water flow in these rivers varies substantially. The majority of the rivers have short course with low volume of water flow. There are 487 rivers with annual water flow less than 100 Mm3, with the total water flow of some 8,300 Mm3. There are 18 rivers with annual volume of water flow greater than 1,000 Mm3 and river runoff can reach 58,400 Mm3. The total surface runoff in XUAR is 88,400 Mm3. There are 25,200 Mm3 of water that could be explored from underground resources. The groundwater resources

50 in XUAR that can be tapped usually mean the groundwater in the plain areas. The refill amount is 39.5 billion m , of which 25.2 billion m3 can, be tapped. Most rivers in XUAR are inland rivers and do not flow into the open waters. The only rivers that flow to the open waters are Eerqisi and Qipuqiapu Rivers. Eerqisi River originates in the mountains within Altai Prefecture in northem part of XUAR and flows into the Arctic Ocean through Kazakhstan and Russia. 'In the southwestern part of XUAR, Qipuqiapu River flows into the Indian Ocean via Indian River. In the hinterland, there are two intemational waterways, flowing out of China to the neighboring country, Kazakhstan: the Yili and the Emin Rivers. Emin River flows to Ala Lake in Southeastem Kazakhstan, while Yili flows to Aerkeshi Lake in Eastern Kazakhstan. Surface and ground- water resources availability reduces from north to south, and from west to east. For example, the area northem XUAR accounts for only 27% of total land area of XUAR, but surface water resources availability accounts for 52%; while the area of southem XUAR is 73% of the total of XUAR, but the surface water resource is 48%.

The melting water from high mountain glacier and snow mainly feeds river systems in XUAR. The water reserve in the glaciers within the three mountain ranges is about 2,600 billion m3 that provides an important regulatory function in controlling river water flow and surface water runoff in XUAR. On average, the amount of water melted annually from glaciers is about 17.8 billion m3 accounting for 22.5% of the regional surface water runoff. The total amount of water resources is rather stable with limited variation among years. The Cv usually is between 0.1-0.5, however, it varies greatly within a year and there is no clear pattem of variation. In general, the amount of runoff is largest in summer (June, July, August and September) accounting for 70 to 83% of the annual runoff. Most of the rivers have limited water flow in spring with poor regulating function, therefore, they cannot meet the agricultural water demrands during spring, causing drought to often occur in spring. In some areas, water shortages also occur in autumn.

Hydrology of the Project Areas in XUAR The characteristics of the major river systems and their tributaries within the project areas are listed in table 4-16, while water resource use of the important rivers and water distribution among seasons are shown in table 4-17. The characteristics of lakes and reservoirs within the project areas are presented in Table 4-18. The hydrological and geographic conditions of groundwater resources of the project areas are summnarized in Table 4-19 and Table 4-20.

51 Table 4-16 Characteristics of Important Rivers in the XUAR Project Areas River System Project County Total'Length Average Runoff over Irrigated 3 (km) years (Mm ) Ata (km2) Urumqi River reaches Changji, Fukang 11.34 15421 Hutubi River Reaches 5.37 4268 Manasi River reaches Manasi, Shawan 190 12.8 5156 Rivers in the eastern section of Jimesaer, Qitai 17.58 15436 the northern part of Tianshan Mountain Yili River reached Charbuchar, Hecheng, 601 159.8 58177 Gongliu, Xinyuan, Zhaosu, Tekesi, Gongnaisi sheep farmf Emin River reaches Tacheng, Emin, Yuming, 23.61 34168 Tacheng Sheep Nucleus Farm Kuitun River reaches Wusu 16.61 8368 Eerqisi River reaches Altai, Fuyun and Fuhai 633 99 52730 Boertala River reaches Bole, Wenquan 15.41 28896 Kaidu-Peacock River reaches Yanzhe,Hejing, Bazhou 38.83 45884 sheep farm, Kuerle Aksu River reaches Wenshu __ 44.38 43544 Weigan River reaches Kuche, Baicheng 35.5 38817 Yeerqiang River reaches Shache, Maigaiti - 68.11 73194 Streams of Tulufan Tulufan 9.62 71773 Streams of Hami Hami 16.61 43454

52 Table 4-17 Surface Water Distribution of Major River Basins, XUAR Project Areas River system Project county Marc.May Jun.-Aug. Sep.-Nov. Dec.-Feb. Annual Conditions of water I J Il l resource use ,Mm, Urumqi River Changji, Fukang 120 790 180 50 1130 Poor: Per capita water reaches availability less than 3,000m3, per mu land less than 1,00Om3 Hutubi River Hutubi 50 370 90 30 460 Poor: Per capita water reaches availability less than 3,00Cm3, per mu land less than 1,000rm Manasi River Manasi, Shawan 210 860 400 120 2380 Poor: Per capita water reaches availability less than 3,000m3 , per mu land 3 l______less than 1,00Om Streams in the Jimusaer, Qitai 440 950 270 100 1760 Less poor: Per capita easten section of water availability northen Tian Shan greater than 3,000m 3 , per mu land reater than 1,00Cm Yili River reaches ChaTbucha, 2860 8640 2900 1280 15670 Good: Per capita water Hecheng, Gc3ngliu, . . availability greater than Xinyuan, Zhaosu, 15,000m3, per mu land Tekesi, Gongnaisi greater than 4,000m3 Sheep Farm L Emin River reaches Tacheng, Emin, 1080 750 330 200 2360 Less poor: Per capita Yuming, Tacheng water availability Sheep Farm greater than 3,000m3 , per mu land greater than 1,00 m Kuntun River Wusu 130 1070 340 130 1660 Less poor: Per capita reaches water availability greater than 3,000m3 , per mu land reater .______than 1,000m Eerqisi River Altai, Fuyun, Fuhai 2870 6010 1450 540 10870 Excellent: Per capita reaches water availability greater than 30,000m 3, per mu land greater .______than 8,000m Boertala River Bole, Wenquan 360 310 370 510 1540 Less poor: Per capita reaches water availability greater than 3,00Gm 3 , per mu land reater than 1,00Gm' Kaidu-Peacok River Yanzhe, Hejing, 900 1750 820 430 3880 Less poor: Per capita reaches Bazhou Sheep water availability Farm, Kuerle greater than 3,00Gm 3 , per mu land greata .______than 1,00Om Aksu River reaches Wenshu 810 2680 1660 470 4440 Medium: Per capita water availability greater than 7,500m3 , per mu land reater than 2,000m Weigan River Kuche, Baicheng 340 2470 590 150 3550 Less poor: Per capita reaches water availability greater than 3,00Gm3 , per mu land reater _ _ __di_ than 1,000m

53 River system Project county Marc.May IJun.-Aug. SeP-Nov. Dec.-Feb. Annual Condinons of water resource use Mm, Yeerqiang River Shache, Maigait 480 4640 1270 430 6810 Less poor: Per capita reaches water availability greater than 3,000m3, per mu land Freater than l,OOOm Streams in Tulufan Tulufan 110 490 220 140 960 Poor: Per capita water availability less than 3,000nm, per mu land 3 less than 1,00m Streams in Hami Hani 390 280 220 170 1050 Poor: Per capita water availability less than 3,000m 3, per mu land ______less _ than l,000m

Table 4-18 Characteristics of important lakes in the p oject areas Lake Geographic Project Area (km) Height of lake Mineralization Location . County surface (m) classification Altitute Latitude Wuluna u 4f 01'-47 25' 87' 02'-S8 35' Fuhai 736 478 Tiny salty

Lake ______Jili Lake 46° 46'-47 00' 87r 21'-S? 33 Fuhai 160 470 Salty Sailimu Lake 440 30'-44° 43' 81 00'-81° 22' Bole 454 2073 Salty Aiding Lake 42° 38'-42° 41' 89° 14'-89° 19' Tulufan 23 .154 Salt

Table 4-19 Groundwater table change tendcy in XUAR Region 1996 1997 1998 1999 Urumqi Up and Down Mainly down Up and down Mainly up +0.7/-1.0 -0.05-1.38 -1.104+3.5 0.1-2.4 Kashgar Up and down Down Down Down +0.14/-0.1 -0.15-0.60 -0.35 -0.12--0.78 Kurle Up and downb Mainly up Down Up and down +0.37/-2.3 0.05-0.76 -0.01-0.64 Changji Down Down Down Mainly down -0.32 -0.05-1.21 -0.17-1.18 -0.18-1.14 Down Down Mainly down Mainly down -0.18 -0.05-0.16 -0.28-1.43 -0.01-0.64 Tulufan Up and down Mainly down Mainly down Up and down 1 +1.14/-0.75 -0.05-1.02 -0.08-1.26 Kuitun Down Down Mainly down Mainly up 1 -0.74-1.30 -1.25 -0.27-1.77 0.92-1.34 Data Sources: National Environmental Quality report 1996 - 2000.

54 Fig. 4-3 Map of Water Resource Distribution in Xinjiang

55 Table 4-20 Natural shallow roundwater resources in the proect areas of XUAR River system Project County Area Natural Natural Groundwater Overlapping Groundwater Groundwater Resources groundwater Resources in Resources in resources of hilly z______Hilly areas ______plain areas and plain areas km ~~~~~~~~millionm' Unrmqi River Changji, Fukang 15421 533 897 1010 419 reaches Hutubi River Hutubi 4268 187 226 304 109 reaches Manasi River Manasi, Shawan 12672 1034 783 1018 798 reaches Streams of the Jimusaer, Qitai 15436 397 786 910 273 eastern part of northern Tian Shan Yili River Charbuchar, 56236 8014 4925 10840 2116 reaches Hecheng, Gongliu, Xinyuan, Zhaosu, Tekesi, Gongnaisi Sheep Farm Emin River Tacheng, Emin, 34168 1678 1286 1914 1050 reaches Yuming,Tacheng I Sheep FarmT Kuitun River Wusu 8368 659 463 806 316 Teaches Eerqisi River Altai, Fuyun, Fuhai 46025 4157 2538 4345 2335 reaches . Boertala River Bole, Wenquan 28896 1047 634 N/A N/A reaches Kaidu-peacock Yanzhe, Hejing, 45886 2340 2295 3483 1116 River reaches Bazhou Sheep Farm, Kuerle _ Aksu River Wenshu 43544 3630 39.23 5488 2065 reaches . Weigan River Kuche, Baicheng 38817 2726 2408 3311 1823 reaches Yeerqiang River Shache, Maigaiti 73194 2458 4727 5268 1917 reaches Streams in Tulufan 71773 650 900 984 570 Tulufan I.I_I Streams in Hami Hami 43454 675 485 1322 552 Data Source: Report on water resource Assessment in Xinjiang, 1999

4.4.5 Surface Water Quality According to the monitoring data of 46 rivers and 57 sections carried out by Xinjiang Water Environment Network in 1995, water quality of important rivers in the project areas is shown in table 4-21.

Data presented in Table 4-21 indicate that the pH value of rivers in the project areas is between 7.5-8.5, slightly alkaline pH, Mercury, phenol, Chromium and soluble oxygen remain within the standard in all river systems in the project areas, which reached standard m. There are only 20 km of river polluted by COD mn accounting for 0.3% of the evaluated river length. The river length that meets standard I of Arsenic is 99.9%, the length of river polluted by NH3-N was 180 km. Generally speaking, water quality in project areas is rather good.

Water quality in lakes and reservoirs is poor while natural chemical component contents are rather high.

56 Table 4-21 Water Quality Assessment of Major Rivers Basins in Project Areas, XUAR River system Project County Assessed Assessed River Grade I Grade 11 Grade III Grade IV Grade V River Length __(kSection (m) (%) (% (%) (%) (%) Urumqi River Changji, Fukang 8 139 13.7 71.3 3 12 reaches Hutubi River Hutubi 1 115 100 reaches I Manasi River Manasi, Shawan I 160 100 reaches Streams of Jimusaer, Qitai 2 70 100 eastern part of northem Tianshan I Yili River Charbuchar,Hec 2 196 100 reaches heng, Gongliu, Xinyuan, Zhaosu, Tekesi, Gongnasi Sheep Farm Emin River Tacheng, Emin, 1 28 100 Reaches Yuming, Tacheng Sheep Farm_ Kuitun River Wusu 2 120 51 49 reaches Eerqisi Rivet Altai, Fuyun, 5 648 39 61 reaches Fuhai X Boertala River Bole,Wenquan 1 97 100 reaches . Kaidu-peacock Yanzhe, Hejing, 3 597 100 River reaches Bazhou Sheep Farm, Kuerle Aksu River Wenshu 4 454 2 48 50 reaches Il Weigan River Kuche, 2 357 100 reaches Baicheng . _ Yeerqiang Shache, 2 297 100 River reaches Maigaiti Streams in Tulufan 2 142 70 30 Tulufan Streams in Hami 1 43 100 Hami . Data Source: Report on water resource Assessment in Xinjiang, 1999

4.4.6 Groundwater Quality The groundwater within the project areas is not polluted in mountainous region, but the groundwater quality in flatlands was characterized by obvious a distribution pattem of stripe. In terms of chemotaxonomy conceming the groundwater quality of the whole XUAR, the upper and middle reaches are of better quality: the mineralization is bellow I.Og/l, which can be classified as heavy carbonic water. It is only in the drainage area of the lower reaches that the salinity in the water increases due to increased evaporation rates, resulting in high mineralization of phreatic water. Table 4.22 presents the groundwater quality data for the river basins in the project area.

57 Table 4-22 Groundwater Quality of Major River Basins in Project Areas, XUAR River Valley Project county Water quality characteristics Urumqi Changji city, Fu Kang city The general trend of chemical components in water is: water quality Hutubi Hutubi county changes from heavy carbonic acid to sulfa acid from alluvial plain Manasi Manasi county, Shawan before mountains to desert areas. In the lower and middle parts of the county alluvial plain, water is Cl type, from low to high degree mineralization. Creeks along Jimusaer, Qitai county The most serious pollution to groundwater is found in the lower and eastern Tianbei middle parts of the alluvial plain. Water quality in the southern and central parts of Changji and Urumqi is good, mineralization is 2g/1, while in the northern part, water quality is poor, mineralization is greater than 2g/1. Looking at depth of groundwater, water quality is poor in shallow layer. According to analysis of wells of 250 meters depth, mineralization is getting smaller and smaller as depth progresses. Water quality in the deep aquifer is better than the shallow aquifer. Yili Chabuchar, Huocheng, The water chemical category is consistent to that of river water, most of Gongliu, Xinyuan, Zhaosu, which is heavy carbonic acid water. The mineralization is between 0.09- Tekesi, Gongnaisi sheep 0.5g/l. in Yili river valley terrace plain areas. The whole valley is the stock farm section where the groundwater runoff converges. The phreatic water is strongly evaporated in this sectionDand the salinity in the surface layer heavily condensed. Because of natural pollution the phreatic water mineralization is betweenl-3p/1. Emin Tacheng city, , Change of Chemistry of groundwater has obvious pattem. In the vast Yumin countyO Tacheng alluvial plain areas before mountains, water quality is good, most of it Sheep stock farm was HCO3 and HC03-S04, it is HC03-Ca-Mg in the alluvial plain of the northem parts. It is HCO3-SO4-Na in the alluvial plain of the southern part. In the easten part, it is HCO3-Ca-Na. In most areas, it is fresh .______water with low mineralization, which is less than I g/l. Kuitun Wusu city Same as Unrmqi River basin Eerqisi Altai city, Fuxun county, The aquifer (water-bearing stratum) is quite thin, the water permeability Fuhai county is strong, surface water body infiltration supply is huge, runoff and draining condition is good, groundwater mineralization is between 0.2- 0.5gW1, most of the water chemical category is heavy carbonate. In part of this area the tertiary system mudstone roof is in shallow buryOthe aquifer is thinOgroundwater runoff condition is bad. The mineralization is >2.0g/1. In hilly area the water supply is mainly from bedrock crevice water. Because the terrain is lower than the central area, the groundwater runoff is quite slow, and water alteration becomes weak. The mineralization is between 0.5-1.5g/1. Water chemical category is .______heavy carbonate. Boertala Bole city, Same as Urumqi River basin Kaidu-Peacock Yanshi county, Hejin county, The chemical type of aquifer is HCO3-Ca-Mg, mineralization is 0.2- Bazhou sheep breeding farm, 0.5g/W. Change of chemical type of the aquifer is horizontal, form lower Kuerle reaches of Kaidu river to the south, minealization increases (0.2-0.8, 0.8-1.4, 1.5-10, greater than lOg/I). The chemical type of water changes HCO3-HCO3-SO4-SO4CI-CI, the exchange of runoff is very strong, it maintains the nature of fresh water. Aksu Wensu county General trend of mineralization of aquifer is: along with increase of Weihe Kuche county, Baicheng mineralization, the chemical type changes HCO-SO-CI. In the alluvial county fan before mountains, it is heavy carbonic acid water with low mineralization. The plain areas below the alluvial fan is influenced by complex factors and the components of groundwater vary greatly. Most panrt of the aquifer is highly mineralized. Yeerqiiang Shache county, Maigaiti At the upper reaches of the river is low mineralized water, since the county river course is short, mineralization in the middle and lower reaches is high, greater than 2gtl. Creeks in Tulufan Tulufan According analysis of water quality, it is good at the northen part of Tulufan County, it decreases in the middle while it is the worst in the southem part of the county. The mineralization of groundwater is 0.5- 2.0gW1, while the meniralizaion of groundwater to the south of Houyan I Mountain is 2.4-5.5g/1. Creeks in Hami Hami Water in creeks of mountains and spring water is fresh. Mineralization of most of water is less than 0.5gW], the chemical type of water is HCO3- Ca, there is small amount of HCO3-Na type.

58 4.4.7 Air Quality While southern Xinjiang is plagued by sand pollution, the northern Xinjiang is faced with smoke pollution from coal burning. Among the 16 monitored cities, the atmospheric quality of 2 cities, i.e., Kelamay and Shihezi meet the national 2nd standard. The atmospheric quality of 4 cities of , Changji, Tacheng and Kuitun are of the national 3rd standard. The rest 10 cities do not meet the national 3d standard. The pollution of total suspended particles, sulfur dioxide (SOX) and nitrogen oxide (NOX) are at a relatively low levels'5 .

Almost all the project areas are located in the countryside or pasture areas and no air quality problems are envisaged. The ambient air quality meets or betters the national 2nd standard. 4.5 Ecological Environment, XUAR 4.5.1 Flora XUAR has rich plant resources with some 3,500 identified of higher plants (of which 1116 kinds are considered to have medicinal values. However, only 120 of the identified medicinal plants are being utilized thus far. In addition, 930 kinds of forage plants (382 kinds are quite common) are identified. Within the forest resource, 89 type of arbor are identified including 8 coniferous, 49 broadleaf, and 32 "economic" trees. In addition there are 57 kinds of trees that are used for artificial afforestation and 57 kinds of shrubs. XUAR has 59 kinds of wild plants under the national priority protection. The main varieties protected are Saussurea involucrate, and so on. The list of 59 plants can be found in appendix.

All the 32 project counties are located in areas where favorable ecological environment for plant growth exists. However, due to increasing pressure on natural resources and changes in land use, the areas with favorable conditions for establishment of wild plants, identified under the national priority preservation list, has been steadily reducing. The project activities, however, should not have any significant impact on the population of wild plants. Figure 4-4 presents the distribution of the main vegetation of XUAR.

15 Data Source: Environmental Quality Report on Xinjiang, 2001, XUAR EPB. The grade classification seeing Chapter 1.

59 in. in;@ W2--" 5F' e - -_-t3*

M I **' , r J

,,_,,,i,;....S>' mm~~~~~~~~2 in tNr

S-.;;' *,. ,vFiai

Fig. 4-4 Vegetation distribution in Xinjiang

60 4.5.2 Fauna Xinjiang is very rich in animal resources. There are 733 kinds of wild vertebrate (of which 49 are amphibian reptiles), 387 kinds of birds, 135 kinds of beasts and 61 kinds of fish.

Xinjiang has 108 kinds of wild animal under the national priority preservation. The main species include: wild donkey, Bos mutus (grunniens), Castor fiber, wild camel, Panthera uncia, giant swan, mountain snow cock, etc. In addition there are 40 kinds of wild animals listed for preservation by the Autonomous Region. Please refer to appendix for names of wild animals under the national priority preservation.

Nationally classified as I or 2nd class preservation animals such as Mongolian gazelle are believed to be present in all of the project counties. However, it is common knowledge that rearing in farming areas or grazing areas has little or no impact on such wild animals. Therefore, it is believed that the proposed project will have no significant impact on wild animals. 4.5.3 Nature Reserves There are 26 nature reserves scattering over the whole XUAR. These nature reserves consist of the zones at the state priority preservation and that at the Autonomous Region priority protection. The zones are under separate management by the forestry system, environmental protection system and agricultural system. Many nature reserves are located in the 32 counties within the proposed project areas.

In Fuhai County, there are regional level mountainous grassland reserve and three national level protection zones of Geerqisi River, Wulungu River. The Kaermaili national hoof animal natural reserve is located in Fuhai County and Fuwen County. In addition there are also the wild horse research center, the national Tianchi Lake ecosystem protection area, Sacsaoul (holoxylon ammodendron) natural reserve in Wusuganjia Lake, and the regional desert grassland protection area in Qitai. Other reserves include the white swan natural reserve in Bazhou, thousand budda cave in Kezhile, ancient arbor natural reserve in Qimuyuan of Wenshu County, the mountain meadow nature reserve in Nalati Mountain (regional level) in , the wild walnut protection area forest reserve, Xinjiang small leaf nature reserve, black swamp nature reserve, wild apple nature reserve, dry land turtle nature reserve in , and the North Giant Salamander natural reserve in Wenquan County.

Table 4-23 presents the distribution (range) and the major nature reserve3s within project areas in XUAR.

61 Table 4-23 The Nature Reserves in the Project CountieS, XUAR Name of the Concerned Area of Reserved Remarks natural reserve project county natural objectives reserve (ha) Kalamaili Jimusaer 1,800,000 Mongolian wild Kalamay Hooved animal reserved belongs to low Ungulate Animal Qitai, hors, Mongolian mountain desert scenery, the natural condition is Natural Reserve Fuyun wild donkey, adverse, the ecological environment is very fragile. county Snow Leopard, The purpose of the reserve is to prevent the desert Lynx, and other vegetation area from becoming desert. wild animals Huocheng Four- Huocheng 35,000 Four-claw Turtle Four-claw turtle is one of three kinds of land turtle claw Turtle and its habitat existing in the world, and only this can be found in Natural Reserve northern arid area. It is a rare and precious anima and is of great importance in scientific research and cultural education. XUAR Gongliu 2,800 Forest ecosystem Prtection of the forest ecosystem and biodiversity Western of XUAR western Tian Shan. Tianshan Natural Reserve Gongliu Wild Gongliu 1,180 Wild walnut and Wild walnut is mainly distributed in the Walnut Natural its habitat mountainous areas of Yili. Wild walnut is an Reserve ancient geographic phenomenon, but it is also a remaining precious tree of the unique local climate. It is one of the treasued species exist only in China, not other places of the world. Due to over gazing which caused grassland degradation, plus the depletion of some springs in the mountain, therefore the ecological environment for wild walnut is deteriorating. Xinjiang Gongliu Gongliu 28,000 Alpine Dragon Dragon Spruce (Picea asperata) dominates in the Dragon Spruce Spruce (Picea forest of the Reserve. It is the remaining species of (Picea asperata) asperata)and its the temperate zone of the Tertiary Period, it Natural Reserve habitat survived geographic and climatic changes and it has become a unique species in the forest area of Tian Shan. The Sacsaoul Wusu 54,664 Sacsaoul The National Sacsaoul (Holoxylon ammodendron) (Holoxylon (Holoxylon Reserve in Ganjiahu of Xinjing is the place where ammodendron) ammodendron) Sacsaoul is concentrated and grows the best. Due to State Natural forest and its over diversion of water resources at the upper Reserve in Ganjia habitat, red fox reaches, the water flow in Kuitun River and Like, XUAR and desert fox Sikeshu River is reducing, even depleted causing the ground water table to deepen, which directly influence the growth of Sacsaoul. Aksu Marsh Land Aletai city Marshy Marsh ecosystem plays an important role in Natural Reserve in ecosystem protecting the water sources in Altai area. Altai Two-river Source Fuyun county, River source Marsh ecosystem plays an important role in Natural Reserve in Fuhai county ecosystem protecting the water sources in Altai area. Altai Grassland Fuhai county 56,700 Mountain The only typical middle Asian meadow grassland Natural Reserve in meadow grassland nature reserve in XUAR. It bears important Jintasi mountain, ecosystem significance in the protection of steppe ecosystem, Fuhai county steppe and the genome of herbosa species. Mountain Xinyuan 65,300 Hilly meadow In the reserve there is typical ecosystem of hilly Meadow type county . type grassland meadow type grassland. Grassland Natural ecosystem Reserve, Xinyuan County Marshland Natural Bole county 267,085 Forest and wild There are very rich wild animal and plants resource Reserve in Aibi animal in this natural reserve. Lake, XUAR

62 Name of the Concemed Area of Reserved Remarks natural reserve project county natural objectives reserve (ha) Natural Reserve, Wenquan 694.5 Xinjiang North Xinjiang North Giant Salamanderand is a special, Wenquan County county Giant rare and precious species which can not be found Salamanderand its elsewhere. habitat Bayinbulu Swan Hejin county 100,000 Mash and Giant' he nature reserve provides reproduction and State Natural Swan, cygnet wintering habitat for animals and plants in the Reserve, XUAR territories, especially for the endangered waterfowl. It is also the ideal habitat of reproduction and growth of swan. The marshland preserved some valuable wild species. Tuo'ermufeng Wensu county 125,637 Landscape It is the largest modem glacier area of China, a key Natural Reserve ecosystem, Snow area to study the biodiversity of Tianshan leopard and ' mountains. It is the only natural reserve in the Northem Goat are country that preserves the high alpine ecosystem. the first national protection priority while red deer, brown bear belong to the second national protection priority Heavenly Pond Fukang city 38,690 Forest ecosystem The vertical distribution of vegetation in typical Natural Reserve including alpine ice and snow zone-alpine meadow-forest-steppe. Biodiversity is very rich. 1,500 wild almond arid There are over 100 kinds of vegetation within the Tacheng wild its habitat Reserve. A lot of beasts live in the reserve. The almond Natural establishment of the Reserve effectively preserve Reserve wild almond - a rare and precious species. Qitai Desert Qitai county 38,600 Desert type The reserve is located in the temperate desert zones Grassland Natural grassland and there are rich resources of desert vegetation in Reserve, Qitai ecosystem this area. Therefore many animal species suitable Couni to live in the desert climate co-exist in this reserve. The co-existence of temperate desert plants and spring water marsh plants also make this reserve somewhat unique. Yili Black Bee Yili Xinjiang wild bee Within the Reserve, the honey source plants are Natural Reserve, and its habitat abundant. There are also many wild honey source XUAR plants. The establishment of the Reserve benefits considerably in preserving large quantity of the .______Tertiary and Quaternary period wild plants.

The wild animal and plants and the relevant habitats that need protection are very complex and special attention should be given to their requirement during final selection of the project sites. No project grazing area or artificial grassland should be included in the project design if they are within the buffer zone or the core zone of any of the nature reserves. Project should discuss with the agencies responsible for the protection of nature reserves before start of any project activities in the proximity of nature reserves.

4.5.4 Soil Erosion and Water and Soil Conservation Soil erosion can be divided into two categories. One is water erosion and an6ther is wind erosion. There are about 0.18 million ha of erosion cultivated land and it takes about 4% of total cultivated land in Xinjiang. The soil erosion for cultivated land is in average degree. The main areas of cultivated land erosion are around Wenquan, Kurle and so on.

63 There are about 9.6 million ha of erosion grassland and it takes about 53% of total grassland in Xinjiang. The soil erosion for grassland is in, average degree. The main areas are around Kashgar, Tacheng, and Harni.' 6 4.6 Social and Cultural Environment, XUAR 4.6.1 Population XUAR is located in the frontier region of China and minority nationality groups form its main population. According to the statistics of XUAR in 2000, the total population in XUAR in 1999 was 17.75 million comprising of 40 minority nationalities. The Han population was 6.8715 million accounting for 38.71% while the total population of mninority nationalities was 10.8785 million accounting for 61.29%. Among the minority nationalities, Uyghur was 8.2503 million, Kazakh 1.3045 million, Mongolian 161,300, Hui 792,600, Kirgiz 166,400 and other minority nationalities 203,400. The project areas will involve 32 counties, the population status of the project counties/farms are listed in Table 4-24.

16 Data sources: Investigation on ecological sysytem in West part of China, 2001, Resear report of Chinese Research Academy of Environmental Sciences

64 Table 4-24 Po pulation Status in Project Areas in XUAR County, city River Reaches Number of Number of Herder Rural Herder Townships Rural Households Population Population Households Changji City Urumqi River Reaches 10 23,425 2,980 94,673 13,853 Fukaing City Urumqi River Reaches 6 15,741 1,483 59,943 7,276 Hutubi County Hutubi River reaches 6 16,666 2,660 70,340 13,846 Manasi County Manasi River reaches 11 21,790 2,155 84,600 8,788 Jimusaer Streams in eastem part 9 21,647 1,754 89,952 8,216 of north Tianshan Mountain _ Chabuchar Yili River Reaches 13 19,916 963 98,078 6,264 Hecheng Yili River Reaches 10 36,203 1,803 178,228 9,326 Gongliu Yili River Reaches 8 24,348 2,820 111,512 15,775

Xinyuan Yili River Reaches 10 33,836 5,660 176,698 33,295 Zhaosu Yili River Reaches 9 14,577 3,048 71,262 17,735 Tekesi Yili River Reaches 8 15,397 3,781 85,361 23,132 Emin County Emin River Reaches 11 16,532 1,043 77,436 5,180 Shawan County Manasi River reaches 12 31,950 1,556 132,839 6,946 Altai City Eerqisi River reaches 10 11,789 2,138 53,984 12,366 Fuyun County Eerqisi River reaches 6 6,756 2,419 33,139 13,739 Fuhai County Eerqisi River reaches 5 8,170 3,118 34,550 13,860 Bole City Boertala River reaches 5 16,088 1,662 76,272 9,071 Wenquan County Boertala River reaches 5 8,838 1,171 42,266 6,087 Yanji Kaidu-Pheonix River 8 12,584 426 59,644 2,163 reaches Hejing County Kaidu-Pheonix River 12 14,790 3,295 14,090 reaches Wenshu County Aksu River Reaches 9 24,105 1,637 114,409 7,589 Kuche County Weigan River reaches 13 56,935 2,026 271,150 9,632 Wengan River reaches 11 25,536 1,521 128,616 7,650 Shache County Yeerqiang River 28 98,849 3,709 470,054 16,099 reaches . Maigaiti Yeerqiang River 9 23,329 474 118,470 2,147 reaches Subtotal (project Counties) 244 599,797 55,302 2,733,476 284,125 Total (Whole Xinjiang) 794 2,008,794 155,637 9131,922 813,072 Ratio(%) 30.73 29.86 35.53 29.93 34.94

4.6.2 Cultural Background The project areas in XUAR are mainly located in pastoral and agricultural areas of XUAR. The educational level of the population in project areas is lower compared with those in urban areas. The education level in project counties is generally lower than the eastern part of China. I

Islam is the mainstream religion in XUAR. There are about 10 million Moslems in XUAR, mainly belonging to the minority nationalities of Uyghur, Kazakh, Hui and Krigiz. Their religious beliefs play a major role in their daily life. 4.6.3 Public Health

65 In general, there is no endemic disease epidemic while the population enjoys good health. In some project areas in the southern slopes of Tianshan Mountain, thyroid gland endemic disease exists. 4.6.4 Cultural Heritage In the project areas in Altai, there are a number of major relics including rock painting, relics of , and thousand Buddha cave. In addition, there are other major relics in the ancient city of Huiyuan (). 4.6.5 Scenic Spots and Tourism The tourism development strategy in XUAR is based on the principle of "Five Regions and Three Lines". Based on this principal, they are planning a unified, overall design, for developing key tourist destinations with unique features and keeping the environmental protection as a focal point. Another aim of centrally planned tourism is to pursue a sustainable development of the tourism industry in the region.

"Five Regions and Three Lines" include the ecological tourism region with Enasi Lake at its focal center, scenic tourism region with Tianchi Lake (Heavenly Lake), and Bositen Lake as its main attractions, the ancient culture and relics tourism region with Tulufan as the center, and tradition and local customs tourism region with Kashgar as its focus. There is also tourism region based in Yili with features of southem Yangtze River outside the Great Wall as the main focus.

The "three lines" include: A) Tulufan-Kuerla-Tazhong-Hetian-Kashgar; B) Urumqi-Tianchi Lake-Kalamay-Wulungu Lake-Genasi; and C) Urumqi-Kundun-Qiaoerma-Nalama-Bayinbruk-Jinshatan-Urumqi. 4.6.6 Infrastructure Many water diversion and storage projects have been constructed in the plain oasis areas at the mountain outlets of river systems. Except for Yili and Eerqusu River systems, 70% to 85% of water in other river systems has been fully utilized. However, due to insufficient input, the aging irrigation facilities, poorly designed and/or incomplete irrigation network, the average irrigation quota in the whole region is 731 M3/mu, which is very high. Meanwhile, the irrigation efficiency of irrigation system is only 46%. Most river systems in XUAR do not have water storage regulating function. In addition, the agricultural production technology and management level are not well developed. High volume of water is wasted within the transfer system due to poor canal maintenance and leakeage, causing secondary soil salinity and sodicity. Agriculture is considered as the main consumer of water resources accounting for 98.2% of total water use in the region. 4.6.7 Land Tenure and Land Ownership Over 80% of the grasslands in XUAR have been contracted to farmer households with a 30 years lease period. The remaining 20% of grasslands has remained in the public domain. All the farmlands have been contracted to farmer households. It is believed that the improvement of land use rights will generate a positive impact on willingness of the herders/livestock farmers to invest in the protection of grasslands. 4.6.8 Land Use and Farming/herding Practices Over half of the lands in XUAR cannot be utilized or are difficult to use. Sandy desert covers 21% of the total land area, Gobi desert 18.3%, saline and sodic soils 3.3%, and

66 swamps/marshlands another 0.2%. The utilized land include, forest, grassland and arable land covering for 34.6% of the total land area, while urban area and land used by industries account for 0.8%. The overall land use in XUAR is summarized in table 4-25, while the land use within the project counties are shown in table 4-26.

Table 4-25 Land Use in XUAR Arabile Forest Grassland Surface waters Urban area & Unused land Total land 1 infiastructure 490.2 361.1 4,800.9 1 509.7 136.9 10,099.7 16,398.5

67 Table 4-26 Land use situation In the project areas In XUAR County, city Arable land Orchards Forest Total Natural Artificial Residents, industries Transportation system Water surface areas Unused land

_Grassland Grassland Grassland and mining

Changji City 31,120 510 48,470 549,490 546,160 3,330 10,730 26,870 16,270 136,600 Fukang City 13,450 150 20,670 614,270 612,290 1,980 8,870 2,270 10,870 112,80( Hutubi 26,470 1,190 43,530 749,270 745,670 3,600 10,000 3,470 17,730 197,400 Jimusasi 21,600 090 26,270 652,290 650,150 2,130 9,130 2,330 8,730 242,400 Qitai County 132,670 730 38,600 858,400 0 0 15,000 3,600 13,270 601,670 Manansi 30,310 250 40,470 595,340 592,510 2,830 12,730 4,200 41,330 309,930 Bole County 18,590 370 39,800 569,350 567,450 1,910 6,000 2,930 54,930 110,470 Wenquan County 13,680 80 20,600 414,990 412,910 2,080 2,800 1,800 23,330 84,070 Kuerle 33,670 4,470 48,400 336,930 0 0 9,870 2,330 19,400 266,400 Hejing County 10,630 2,200 102,870 2,465,090 2461,470 3,620 25,330 3,200 138,000 792,930 Yanzhe 11,220 550 8,730 186,730 186,730 0 3,870 1,400 7,400 70,800 Wenshu County 31,050 5,130 32,800 558,780 555,420 3,360 7,400 3,930 224,670 295,730 Kuche County 38,150 6,730 192,470 659,640 655,850 3,790 14.330 4,670 32,200 361,130 Baicheng County 32,450 800 42,670 729,230 724,360 4,870 5,270 1,730 100,730 402,670 Shache County 54,460 6,600 16,470 257,290 202,830 54,460 21,000 6,400 54,330 575,270 Maigaiti 23,020 2,070 156.070 151,000 151,000 0 25,600 1,930 25,600 730,330 Charbuchar 22,050 670 41,470 304,810 303,440 1,370 8,000 2,400 12,400 34,400 He Cheng 23,490 3,270 47,670 313,460 312,020 I ,440 13,000 3,400 16,470 119,200 Gongliu 16,690 470 68,530 275,630 271,630 4,000 5,930 1,200 11,470 10,800 Xinyuan 25,500 2,400 86,670 512,220 507,770 4,450 10,200 1,730 18,070 54,730 Zhaosu 26,220 40 7,000 549,390 545,890 3,510 7,730 1,800 139,270 64,800 Tekesi 11,9301 1,000 82,130 476,660 470,460 6,200 4,470 1,930 36,270 152,470 Tacheng city 116,800 540 14,330 224,600 0 0 7,800 2,530 7,870 24,600

68 Table 4-26 continued County, City Arable Land Orchards Forest Total Natural |Artificial Residents, industries Transportation system Water surface area Unusedland GrasslGras Grassland Graand nd land mining (ha) Emin 40,670 430 28,800 706,110 699,510 6,600 10,330_ 3,270 7,600 29,930 Yuming County 48,470 90 19,870 443,200 0 0 4,800 1,470 22,600 70,670 Shawan County 40,310 1,130 60,470 704,570 703,170 1,400 16,130 7,270 99,470 548,070 Wusu 87,800 1,600 129,470 580,470 0000 0 13,930 4,000 77,000 535,670 Altai City 12,470 390 179,000 772,230 764,200 8,030 7,070 2,200 21,730 142,400 Fuyun County 9,650 40 235,800 3,323,790 3,319,210 4,590 5,600 1,530 11,800 230,330 Fuhai County 16,310 100 66,670 2,362,380 2,356,710 5,670 3,270 2,600 61,000 203,530 Tulufan 20,670 8,470 4,870 206,130 0 0 10,130 3,270 10,800 - 1,094,600 Hami 30,130 3,070 206,470 1,437,470 0 0 15,730 4,530 15,200 6,846,130 Subtotal(Project 1,071,690 55,620 2,158,070 23,541,230 19,318,830 135,200 332,070 118,200 1,357,800 15,452,930 Counties) - _- - _ - _530_ _ Total(Whole 2,277,680 135,270 6,665,730 57,656,100 57,258,770 397,330 - - 671,530 -211,470 4,518,930 - -100,408,400 Xiniiang) I I I__ Ratio (%) 47,050 41,120 32,3801 33,740 34,030 49,450 5,590 30,050 15,390

69 4.6.9 Other Employment/Manufacturing Opportunities XUAR covers vast territories with total land area of 1,662,563 km2. XUAR boosts abundant grassland resources and it is one of the most important pastoral areas in China. The total area of natural grassland is 572,588 kmn2, accounting for 34.44% of the total land area of XUAR. The grassland area that can be used is 480,068 km2 or 28.9% of the total land area of XUAR. Grasslands in XUAR consist of the following four major regions: The southern slope of Altai Mountain: it mainly includes Altai area; A) The northern slope of Tianshan Mountain, including Yili Precfure, Boertala, Shawan County, Wusu County of Tacheng Prefecture, Changji of Wusu City and Urumqi; B) The southern slope of Tianshan Mountain: it mainly includes the areas of Bayinggelun except for Nouqiang County and , , Aheqi County of Kezhilesukeerkezhi Prefecture; and C) The northern slope of Kunlun Mountain and Pamier Plateau: in mainly includes Kashgar, Hetian, Wuqia County, Atushi City, Aketao County of Kezhilesukeerkezhi Prefecture, and Qiemo County and Nouqiang County of Bajinggelun Prefecture.

In addition, there are several smaller areas including: (i) Tage Basin and the westem tip of Zhungeer Basin, including Tacheng City, Touli County, Yming County and Hefeng County; and (ii) the eastem section of Tianshan Mountain, including Tulufan and Hatni.

Table 4-27 represent the grassland resources of project counties/farms in XUAR, while the grassland types and extent in XUAR are listed in Table 4-28.

70 Table 4-27 Grassland Resources in Project Counties/Farms in XUAR Country/City River Brsin Natural Arabie Land Artificial Number of Grassland , Grassland Livestock (ha) i (head) Changli Unumqi River Basin 546,160 31,120 3,330 33,6c0 Fukang Urumqi River Basin 612,290 13,450 1,980 22,980 Hutubi Hutubi River Basin 745,670 26,470 3,600 30,680 Manasi Manasi River Basin 592,510 30,310 2,830 28,610 Jimusaer Streams in eastern section 650,150 21,600 2,130 29,350 of northern Tianshan , i Qitai Streams in eastern section 0 0 0 0 of northern Tianshan , . Charpuchar Yili River Basin 303,440 22,050 1,370 27,740 Hecheng Yili River Basin 312,020 23,490 1,440 49,510 Gongliu Yili River Basin 271,630 16,690 4,000 39,410 Xinyuan Yili River Basin 507,770 25,500 4,450 69,960 Zhaosu Yili River Basin 545,890 26,220 3,510 57,110 Tekesi Yili River Basin 470,460 11,930 6,200 46,730 Gongnaisi Stock Yili River Basin 0 0 0 0 Farm Taicheng Emin River Basin 0 0 0 0 Emin Emin River Basin 699,510 40,670 6,600 49,040 Yuming Emin River Basin 0 0 0 0 Taicheng Stock Emin River Basin 0 0 0 0 Farm Shawan Manasi River Basin 703,170 40,310 1,400 43,560 Wusu Kuitun River Basin 0 0 0 0 Altai Eerqisi River Basin 764,200 12,470 8,030 40,630 Fuyun Eerqisi River Basin 3,319,210 9,650 4,590 46,680 Fuhai Eerqisi River Basin 2,356,710 16,310 5,670 30,130 Bole Boertala River Basin 567,450 18,590 1,910 28,170 Wenquan Boertala River Basin 412,910 13,680 2,080 24,430 Yanzhe Kaidu-peacock River 186,730 11,220 0 18,010 Basin . Hejing Kaidu-peacock River 2,461,470 10,630 3,620 65,110 Basin . Bazhou Stock Kaidu-peacock River 0 0 0 0 Farm Basin Wenshu Aksu River Basin 555.420 31',050 3.360 41,470 Kuche Weigan River Basin 655,850 38,150 3,790 57,330 Baicheng Weigan River Basin 724,360 32.450 4,870 50,530 Shache Yeerqiang River Basin 202,830 54,460 0 73,290 Maigaiti Yeergiang River Basin 151,000 23,020 0 34,670 Tulufan Streams in Tulufan 0 0 0 0 Hami Streams in Hami 0 0 0 0 Subtotal 19,318,830 601,490 80,740 1,038,810 XUAR 57,258,770 2,277,680 397,330 3,016,450

Proportion (%) _ 33,740 26,410 20,320 34,440

Notes: 1: Data source: Statistic Year Book of Rural Social and Econornic Situation in XUAR in 2000. 2. The area of natural grassland is based on "Statistics of Grassland Resources in XJ" (1989), field survey data.

71 Table 4-28 Types of Grassland In XUAR Type Type of grassland Total area Proportion of total Used area Proportion of Notes I(ha) grassland area, % (km2) the area, % Steppe Warm temperate 1,166,000 2.04 108.62 93.15 Distributed in the westem partof northem XUAR as the mountainous steppe meadow areas of Yili, Tacheng, Altai, Boertala and Jichang. Yili and Tacheng have the biggest share. It accounts for 60% of total in XUAR. Warm temperate 4,807,700 8.40 442.25 91.99 It can be seen in all prefectures of XUAR. The biggest ones are steppe Tacheng, Yili and Altai, the total of the three areas accounts for 2/3 of the total of XUAR. Bayinggelun, Hami and Boertala prefecture follow. Temperate desert 6,298,600 11.00 580.97 92.24 It can be seen in all prefectures of XUAR, Hami has the biggest par, next are Tacheng, Kezhilesukeerkezhi. The total of the three areas account for 50% of total (same type) of XUAR. Desert Temperate deserted 441,850 7.72 356.63 80.71 Except in Yili, it exists in all other prefectures of XUAR. The biggest steppe areas are located in Hami and Altai. Temperate desert 2,133,200 37.26 1609.99 75.47 It is distributed in all prefectures of XUAR, Altai has the largest area,. next are Changji and Tacheng. The subtotal of the three accounts 2/3 of the total (same type) of XUAR. Alpine desert 1,117,500 1.95 80.48 72.01 It is mainly distributed in Bayinggelun, Kezhilesukeertezhi, Aksu, ______Kashgar ______and Hetian. Alpine grassland 4,331,900 7.56 386.09 89.13 This type grassland is mainly distributed in the prefectures of southem XUAR, Bayingelun takes the biggest share, it almost accounts for half of the total of XUAR. The typical one is sub-alpine grassland in Bayingbruk. Steppe Alpine Meadow 3,763,700 6.56 341.90 90.84 Except for Kalamay, it is distributed to all other prefectures of meadow XUAR, Bayingelun has the biggest area which accounts for 1/3 of the total of XUAR. Altai and Yili also have rather large areas. Low-lying flat 6,885,800 12.03 603.62 87.66 It is distributed to all prefectures of XUAR while southem XUAR has Meadow the major part. Bayingelun has the biggest area accounting for 1/3, next are Aksu and Kashgar. Mountainous 2,870,600 5.01 265.70 92.56 It is mainly distributed in the mountainous areas of northern XUAR Meadow as Yili, Altai and Tacheng, the three areas account for 80% of the total (the same type) of XUAR. Marsh 266,600 0.47 24.44 91.67 In XUAR, there is limited areas of the grassland type, the largest area is located in Bayinggelun accounting for over 70% of the total (the I same type) of XUAR, next is Altai accounting for 16%.

72 In general, the grassland production system can be roughly classified into the following three models:

A) Semi-pastoral use of natural grasslands: The most original grazing model for the best use of natural grassland in XUAR, using rotational grazing and moving between different pastures according to climatic changes, topography, hydrology and vegetation characteristics of different areas in Northem and Southern XUAR. In Northern XUAR, the semi-pastoral grazing involves the use of summer pasture, spring-fall pasture and winter pasture, while in Southern XUAR, they only use summer-fall pasture or winter-spring pasture system. According to the statistical data obtained at XUAR, the grazing livestock on the natural grassland accounted for about 70% of the total livestock heads of the region;

B) The use of natural grassland for harvest, mainly within winter pastures. In this production model, herders harvest the grass.and store it for use during winter months as an important supplementary feed to the grazing practices. However, the areal extent of this type of grassland use is quite small and covers only 2.7% of the total natural grasslands. With the exception of Kalamay, all other areas in XUAR have such grassland; and

C) Artificial fodder crop base production system where due to either lack of adequate natural pasture or the general tendency of the inhabitants, the livestock production is mainly depend on the use of artificial fodder crops. This production system has become an important production system, specially in areas where adequate natural grassland is not available. The output of irrigated,forage and fodder crop is quite high as long as adequate water supply and nutrients are available. This is a system that is more accepted by the Uyghur and Han farm based livestock farmers. Tables 4-29 and 4-30 present the average grass yields of different grassland types and their carrying capacity, respectively.

Table 4-29 Grass yield of different grassland types Grassland Type Percentage of the grassland type in the total Fresh grass output, (kg/ha) grass output, (%) XUAR 100 2013.0 Warm temperate steppe meadow 4.72 3721.5 Warm temperate steppe 8.40 1627.5 Warm temperate desert 6.77 997.5 Alpine steppe 3.45 766.5 Temperate deserted steppe 3.57 856.5 Temperate Desert 16.80 894.0 Alpine Desert 0.24 255.0 Low-lying flat Meadow 24.25 3441.0 Mountainous Meadow 18.28 X 5892.0 Alpine Meadow 11.63 2914.5 Swamp 1.89 6645.0

73 Table 4-30 Grazing capacity of different types of grassland in XUAR Grassland Type Theoretical Carrying Capacity ratio. %) Sheep Unit Theoretical Grassland Capacity, 1,000 sheep unit Requirement (Ha/Sheep Year) Total in XUAR 32248.6 100 1.49 Temperate steppe meadow 1610.0 4.99 0.67 Temperate steppe 2837.9 8.80 1.56 Temperate deserted steppe 2214.0 6.87 2.62 Alpine steppe 1647.2 5.11 2.35 Temperate steppe desert 1059.7 3.29 3.37 Temperate Desert 4528.1 14.04 3.56 Alpine Desert 133.0 0.41 6.05 Low-lying flat Meadow 7017.7 21.76 0.86 Mountainous Meadow 6667.0 20.67 0.40 Alpine Meadow 4128.7 12.80 0.83 Marsh 405.3 1.26 0.60

4.6.10 Employment Opportunities For a long time, people of all nationalities in XUAR have mainly been engaged in livestock and agricultural production. Therefore the industrial base in XUAR is rather poor. However, since the liberation, new industries, secondary and tertiary industries have been developing rapidly, especially since the implementation of open to the outside world and reform polices. Major industries include iron and steel, coal, electricity, oil exploration, chemical industry, construction materials, machinery, light industry and textiles. Agricultural activities include farming, forestry, animal husbandry and aquaculture. According to the year 2000 annual statistics, the total output value of agriculture (farming, forestry, animal husbandry and aquaculture) was 48.72 billion RMB Yuan, of which, farming output value was 36.065 billion RMB Yuan (74%), forestry was 835 million RMB Yuan (1.7%), the output value of livestock industry was 11.451 billion RMB Yuan (23.5%), and the output value of aquaculture was 380 million RMB Yuan (0.7%).

At the end of 2000, the total arable land area was 3.417 million hectares while the total cropped area was 3.389 million hectares, of which, the acreage of grain crops was 1.446 million hectares, cereals 1.354 million hectares, cotton 1.012 million hectares, oil crops 309,980 hectares, legume 91,780 hectares, and sugar beet 55,875 hectares. The total output of grain crops was 8.086 million tons, legume 256,700 tons, cotton 1.5 million tons, oil bearing crops 601,400 tons and sugar beet 2.927 million tons. Given the fact as above, one can see that the economy in XUAR is developing rather fast and there are many employment opportunities. 4.6.11 Socio-economic Development Plan During the first 10 years of the 21 " century, the development objectives of XUAR are briefly outlined as follows. It is hoped that from 2001-2003, GDP growth would reach 8%, between 2004 to 2010, it should reach over 10%. The growth of expendable income of urban residents should reach to about 7%, while the annual net income increase of farmers should reach about 150 RMB Yuan.

During 2001-2010, it is planned to complete 900 billion RMB Yuan of investment in fixed assets in the whole region. During the "Tenth Five-Year Plan" period, it is predicted to complete 420 billion RMB Yuan of investment in fixed assets, of which, a total investment of 100 billion RMB Yuan will be used to construct 70 key projects in infrastructure, ecological environment and industrialization development.

74 Within 10 years, a number of projects are planned to be implemented including:

A) The integrated management of the middle and lower reaches of the Tarim River, through strengthening management, constructing control projects, cleaning and dredging riverbed, it is to protect the diversiform-leaved poplar (Poplardiversifolia) and grasslands;

B) Desertification control program in the southern tips of Tarim Basin and the southern tips of Zhungeer Basin by strengthening protection of the vegetation in the desert. It is planned to use biological control measures along with engineering measures to restore vegetation in these areas;

C) The integrated management and ecology protection in the Aibi Lake region. Damage to the forest and land reclamation will be prohibited. It is also to develop water-saving agriculture, to develop windbreak forest, to implement water diversion projects on different river systems so as to increase the water availability and to stabilize water level and to improve the water quality in the Lake;

D) The natural forest protection program, meanwhile'the energy consumption in rural areas will be adjusted;

E) The restoration of forest and grassland used by farm crops;

F) Protection of the atmosphere and water quality of Urumqi; and

G) The IPDP that is planned for implementation within the next year with main efforts being focused on integrated pastoral development.

75 5 Public Participation The IPDP is an integrated pastoral development project, aiming at alleviating livestock production constraints within for the project participant (beneficiaries) within project counties through improving the condition of natural grasslands, improving feed quality and availability, improving breed quality of the livestock and improving the participating herders/farmers' livelihood by providing the environment necessary for efficient integration of production processing and marketing of livestock commodities.

The Gansu and XUAR provincial/regional governments and county governments strongly support the project, and the county project management offices (CPMOs) established under their jurisdiction have actively participated in the preparation of county feasibility reports and have made many constructive suggestions. 5.1 Consultation Method and Subject In accordance with the State enviromnental protection laws of the PRC, regulatory ordinance of XUAR and Gansu, the World Bank requirements, and to better learn the opinions and suggestions of the public in the areas affected by the project development, PPMO and CPMOs have made every attempt during the preliminary project preparation period by means of meetings, farmer household contacts and bulletins. The EA team also made 5 field trips to the project areas and visited a number of project counties in both Gansu and XUAR. Talks were held with the staff from local PMOs and the local governmental departments of agriculture, water resources, forestry, and environmental protection and farmer representatives, and-their opinions and views on the project were solicited. Visits were also made to some farmer households to have an understanding of the status of pesticide and fertilizer use, livestock production, living standard, public health and their understanding and attitudes toward the project. In additions, certain questions were prepared by the EA team and submitted to the social assessment teams to be asked from the project affected people during their extensive Participatory Rural Appraisal (PRA). 5.1.1 Consultation with Family or Individual The EA team consulted 10 "typical" herders/farmer households in each of the visited counties during its 5 field trips to leam their opinions and suggestions on the project development plans. During the consultations the team first gave a short introduction to the proposed project and project components to the consulted herders/farmers, and then requested for their opinions and suggestions with regard to the proposed project development and recorded their opinions.

The social assessment team conducted more detailed and systematic questionnaire survey using PRA method. The consultation covers 4 villages of 8 project counties in Gansu, and 6 villages and 12 counties in XUAR. In Gansu, 400 families were visited, about 2000 People were consulted, including 1100 males and 900 females. In XUAR, 600 families were visited, about 3200 People were consulted, including 1700 males and 1500 females. The details of PRA results are available in the social assessment reports prepared for Gansu and XUAR. 5.1.2 Inter-agency and NGO Consultation During its 5 field visits, the EA team visited local officials concerned at the township level and questions were asked so that their opinions and comments toward the proposed project could be recorded. Consultation meetings were also arranged with specialist

76 within lined agencies in Gansu and XUAR to hear their' concerns and comments with regard to the proposed project. Letters were sent to relevant and potentially interested non-government organizations describing the proposed' activities and objectives/goals of the proposed project and to seek their opinions/comments. A sample of the letter mailed to the NGOs, the list of the NGOs, and iheir responses are attached to this report as an Annex 4. 5.2 Public Opinion and Suggestion The following findings are based on the' consultation made by the EA team during its 3 field trips to the 6 counties in Gansu and 5 field trips to' 12 counties in XUAR, the analysis of questionnaires sent to more than 100 herders/farmers, and the results of PRAs conducted by the social assessment teams in Gansu and XUAR. The main findings are as follows: Most of the herdsmen/farmers interviewed support the project. Majority of the interviewed farmers (97% in XUAR according to the SA study) would like to receive the World Bank-loan; Most interviewed herders view grassland degradation as major concern and are well aware of the degradation problem and its impact on their livelihood. The causes of grassland damage are believed to be both natural and artificial. However, few of the interviewees were eager (about 10%) to borrow money-to improve the natural grassland conditions and see that as the responsibility of local/national government. The majority (about 70%), however, stated that if they are allowed, they would like to use the borrowed money to purchase more livestock; Majority of interviewed lined agency scientist considerthe project as an environmentally sound project and they believe that if the project could effectively monitor the number of animals within natural grassland to prevent overgrazing and grassland degradation, the impact of the project on the environment should be positive; The response from the contacted NGOs (list is presented in Annex ...) indicate that the majority approve the project in principle, but caution the project with regard to the use of water resources and over-exploitation (mining) of water resources for irrigation of artificial pastures. They are also somewhat wary of potential increase in the number of animals and the higher feed needs of the improved breeds that could have negatively impact natural grasslands. They recommended to include plans within project monitoring and management component to effectively enforce control of animal numbers, especially within natural pastures to prevent any increase in degradation of the already degraded natural grasslands of Gansu and XUAR; In general, all the cadres at grassroots units, staff of the provincial and city project offices, staff of the livestock bureaus at provincial, city and county levels and officers of the Ministry of Agriculture who were interviewed strongly support the implementation of the project. They view this project as a very good one, which will strongly promote the development in XUAR and Gansu, even in the whole western region of China. The majority of the interviewees regard this project as a good environment project, which will not basically generate environment pollution and cause 'damage the ecological environment. They think, in fact, that the project bears important significance on the protection of grassland resources in the western region of China. 5.3 Information Disclosures and Feedback Information disclosure bulletins were posted in 13 project counties in Gansu and 32 project counties in XUAR by respective PPMOs in April 2002. The bulletins include information on the project briefing, potential environmental impacts possibly brought

77 about by the proposed project and solicitation for comments and suggestions from the local farmers and the public; The PPMO stored the EA TOR in the county libraries of all project counties in April 2002, so that the public can read it without the permission of local governments. 5.1.3 Information Disclosure Plan of the PPMOs Mass media such as TV stations, radio broadcast stations, press and bulletins are employed to inform the public of the significance of the project, the project briefing and the environmental aspects related to the project. The EIA Report will be available to the public. The PPMOs have agreed to make these documents available in the library of each project county concerned, and the names of the places where such documents are available to the public will be published in newspapers. In this case, the public can have access to the infornation concerned without going through a governmental procedure. The PPMO will set up complaint telephone in each level of the PMOs, gathering and recording the public's complaint on environmental issues. Upon receiving the complaint, the PPMO should make arrangement with local CPMO to solve the issues on site along with local EP bureaus and other relevant government authorities within 48 hours. 5.4 Beneficial Participation Plan In order for the farmers to participate in the project design more actively, during project pre-appraisal period it was suggested to the PPMO to develop a detailed beneficial participation plan. Presently a beneficial participation plans for IPDP have been prepared by the respective PPMOs. The plans detail participating activities in each stage of project implementation and participants including herders, farmers, government organizations, NGOs and particularly the disadvantaged groups including women and minority nationalities in the project area. Since no specific sites and dates of participating activities are specified in this plan, it is suggested that the PPMO develop a concrete schedule based on the plan to guarantee a smooth implementation of the plan during project implementation.

In addition, according to the Bank requirements, social assessment teams have prepared Minorities National Development Plans (MNDP) for both Gansu and XUAR. 5.5 Summary of Public Participation The IPDP has won strong support from each level of government of Gansu and XiUAR that will play a role of administrative guaranteeing in the successful implementation of the project. In addition, the majority of consulted herders and livestock farmers are willing to participate in the project and expect that they will benefit from it, which lays a solid foundation for project implementation.

The PPMOs attached great importance to the public opinions and have made detailed beneficial participation plans and concrete plans for information disclosure of the IPDP, which is favorable for the herders and livestock farmers to know the project, propose constructive suggestions and actively participate in the project plan and design. The project has integrated the proposed suggestions into the design of the project, which will play a role in safeguarding the livestock farmers' and herders' benefit from the project.

As to the environmental concerns caused by the proposed project, the EA team and designers of all project components have worked out corresponding mitigation measures, which have been incorporated into the project design documents.

78 6 Analysis of Alternatives Since the propose EPDP is mainly a rehabilitation and improvement project and considers the improvement of natural grasslands, artificial grasslands, and breed improvement, the project study team considered to only review the "with" and "without" project scenarios and no other alternatives were considered. This chapter will discuss the "with project" and "without project" alternatives. 6.1 Analysis of "Without Project" Alternative A number of major constraints for livestock production systems exist in the project areas that limit livestock farmers' and herders' income. In Gansu, with the exception of Sunan County in Zhangye Prefecture and highlands of Gannan Prefecture, the majority of other counties (over 70% of total area of project counties) are pnmarily relying on forage, fodder, 'and agricultural by-products as the animal feed, and the main limitation to livestock development are adequacy (quantity) and nutritional value (quality) of feedstuff, and availability of water resources for both animal dririking and irrigation. In XUAR, however, more than half of the counties rely mainly or, partially on semi-pastoral production system and rely heavily on natural pasture for summer, spring and autumn grazing and artificial pastures, cut and carry and agricultural by-products for winter- feeding. The apparent grassland degradation due to overgrazing is a major concem for sustainability of the livestock production activities if no action to improve the grassland condition is taken place. 6.1.1 Current Status of Natural Grasslands A major constraint is the poor status of natural grasslands, especially in spring-autumn and winter pastures. Summer pastures also show evidence of signs of heavy grazing (overgrazing) that if not addressed in the near future, could lead to their degradation. The main reason for grassland degradation appears to be the poor and inadequate management of grasslands and lack of adequate capacity to enforce' grassland laws. Soil erosion, especially sheet and rill erosion are also causing poor soil fertility causing reduction in grassland soil quality and grassland carrying capacity. Most herders interviewed in Yili and Altai prefectures in XUAR and Lintan and Sunan counties in Gansu are well aware of the grassland degradation problems, but are not in a position to do something about it. 6.1.2 Current Status of Pen-fed Livestock Development and fodder production Another factor restricting livestock farmers' income increase and improvement of livestock development in agricultural areas (pen-fed production system) is inadequate supply of nutritious feed material. Field visits to Maigaiti and Sache counties in Kashgar Prefecture and winter pastures in Fukang county in XUAR and Lintao, Zhangye City and Jiuquan counties in Gansu revealed the poor quality of some forage material available for sale in the market. One of the main ingredients of the available forage in most of the visited counties was the very poor quality spear grass (Phragmytes) that is very poor quality (low nutrition) grass with high' silica content. Use of the poor quality feed prevent timely fattening of the animals and reduces the potential income of the livestock farmers. Inappropriate, inefficient irrigation methods on forage and fodder producing farms is believed to be one of the major reasons for the widespread occurrence of saline and sodic soils in Northwest Gansu, especially in Jiuquan Prefecture and the northeastem sections of Sunan county (bordering Jiuquan City). Poor irrigation methods, and poor soil fertility is believed to be the cause of relatively poor fodder crop and forage yields in other areas visited. The main reasons for the present poor soil fertility status are:

80 Little application of green and farmyard manure, leading to low organic matter content in the soil, poor soil structure, soil compaction, increase in bulk density, and low permeability, leading to a reduction in root volume and water availability to the plants, and imbalanced application of macro nutrients, especially nitrogen (N), phosphorous (P), and potassium (K) fertilizers. 6.1.3 Existing feeding status of sheep and dairy cattle In Gansu, the majority of animals are grazed using intensive livestock development model, mainly using pen feeding, or a mixture of semi-pastoral and intensive feeding model. In these areas, sheep are fed using a combination of grazing and pen-fed. Flocks go out for grazing at daytime and return to shelter at night. Since cultivated land and grassland are side by side, in order to avoid crop damages, flocks need to be herded by herders. Crops residues, by-products of crop processing such as rice husk, bran and soybean cake are also used as feedstuff. Even though, the number of sheep kept by farmers is usually rather small, feeding and management practices are very intensive.

Sheep in the semi-pastoral areas of Gansu mainly depends on grazing. In winter and spring, grazing is in winter and spring pastures close to the settlements and herd moves to summer and fall pasture at the beginning of summer. The size of the flock is usually rather large and sheep dogs are widely used for herding. In winter months, hay is used as supplementary feed, and small amount of concentrate is also used to feed pregnant sheep and sheep after birth. All hay is planted by farmers and due to lack of adequate natural grassland, cut and carry is seldom practiced. The most common fodder grass is oat and peas that are planted around homesteads and harvested and stored for use in winter months. There is no winter shelter for most of the sheep in pastoral areas, sheep stays in open field all year round, so low temperature and snow disasters can easily cause damage to sheep in winter time.

In XUAR, contrary to Gansu, the main livestock development model is the semi-pastoral production system, accounting for some 70% of the total number of small ruminants in the region. In all prefectures in northern XUAR, Bazhou, Kezhou and Hami prefectures of southern XUAR, 70%-90% of the animals are using natural pasture as the main feed source. Even in areas with heavier share of agricultural activities, 30% to 50%/O of the animals are grazing on natural pasture all year round or seasonally.

On natural grassland in XUAR, the number of livestock on grazing accounts for about 70% of the total number of animals. In all prefectures in northem XUAR and Bazhou, Kezhou and Hami prefectures of southem XUAR, 700/o-90% of the animals is on grazing on natural pasture. In those areas with heavier share of agricultural activities, 30%-50% of the animals is on grazing on natural pasture all year round or seasonally.

Rotational grazing between different pastures dominates semi-pastoral sheep production in XUAR. Grazing of sheep in XUAR follows the following pattem:

Summer pasture: Usually from early June to early September in middle and high mountain areas with altitude of over 2000 meters;

Spring and fall pasture: Spring from early April to early June, and fall from late August to November in alluvial plain areas before mountains and hilly areas. The spring and fall pasture are almost invariably within the same grassland areas; and

81 Winter pasture: Usually from November to April of the following year in the winter pasture within river floodplains, temperate deserts, mainly in proximity of their winter settlements. 6.1.4 Present breed quality of sheep and dairy cattle Because of the climate, the human intervene and the imbalance in supplying for forage grass in different season, the quality of livestock is not,high in general resulting in descending of transformation rate from grass to meat. At the same time, in the project areas, good livestock breeder is scarce and low level's improved livestock and local livestock breeds are relatively larger, which makes the'weak capacity of unit production that is difficult to form rational livestock structure and good revolving model. 6.1.5 Existing constraints with Market Development Review of the operations of the existing markets in project counties indicates that market functions are simple, facilities are inadequate and marketing practices are poorly developed. Livestock farmers and herders do not have a good appreciation of markets and do not participate in market operations. Therefore, effective marketing system for agricultural products has not been formed in the project area

In most parts of Gansu, there is no specialized production organization that produces grass and supply to the market. The state operated, livestock farms usually have their own feed and grass production base. Farmers produce some feedstuff for their own animals. The marketing volume of feed grass is not well developed. 6.1.6 Present status of applied research, extension and training At present the infrastructure for conducting applied research and technological development in Gansu and XUAR exist. However, the level of training is not up to standards and adequacy of research budget in areas of sheep and dairy cattle development and grassland management/improvement are questionable.

Another major constraint within project areas in Gansu and XUAR is the lack of well- developed and assertive extension department to disseminate the results of applied research in areas of animal husbandry and grassland management to the herders and livestock farmers. There is a large gap between the available scientific knowledge and what is available to the livestock farmers/herders'in the areas of feeding technology and breed improvement. The inadequate number of well trained and experienced extension personnel makes it difficult to launch regular farmer training, and a lot of new technologies and new research results cannot be disseminated to farmers, limiting farm production improvement.

During field visits of the EA team, strong desire for training was expressed by both extension personnel and the livestock farmers/herders. 6.2 Analysis of "With Project" Alternative The project's objective is to improve the livelihood of the livestock farmers and herders in the project areas through the establishment of integrated, demand driven and sustainable livestock development production systems, including introduction of community based grassland management system, artificial pasture development and introduction of progressive market systems. The achievement of this objective would not only lead to reduction of poverty and greater social stability in the project area, but it

82 would also enhance food security and fine wool supply for the province and the country as a whole.

Although the impact of the project appear to be small considering the size and magnitude of the livestock industry in XUAR and Gansu, the project will have a positive impact on the socio-economy of the project beneficiaries, and if successfully implemented could have a more significant impact by being used as pilot scheme for dissemination of information and form a basis (nucleus) for further development of an integrated livestock industry and grassland improvement outside the project areas. If successfully implemented the project should provide for strengthening the capacity of the lined agencies in application of new findings in applied research and breed improvement technology and should also strengthen grassland management stations in implementation of grassland laws and reduce grassland degradation within the project areas.

The project, if successfully implemented, should also provide better forage and fodder crops in artificial pastures and farm fields by introducing better seed quality, introduction of inoculums for coating the leguminous crop seeds, more efficient and timely use of appropriate fertilizers, more responsive extension and development of better rural marketing activities. The project implementation would improve the livestock farmers' and herders' knowledge of livestock production and increase their income. If successfully implemented, the project would directly benefit 30000 livestock farmers and herders in Gansu and 35000 livestock farmers and herders in XUAR.

The project supports protection of benefit of the disadvantaged groups including women and minority nationalities in the project area. If successfully implemented, the project would benefit about 80000 women and 125000 minority population accounting for 65% of total beneficiaries of the project.

The project implementation may bring a number of negative impacts such as the effects of increased fertilizer and pesticide application on aquatic environment, potential land occupancy, and some impacts on local herders and farmers during development of grassland improvement programs and artificial pasture/irrigation infrastructure development. In addition there is a potential for runoff of nutrient rich material from sheep feedlots and also the dead animals, especially dairy cattle. Regarding the possible increase of non-point source pollution, the project has developed and is going to promote monitoring of the nutrient loading within surface water bodies and groundwater to monitor and prevent the occurrence of non-point source pollution downstream of the project areas. Better watershed management and incorporation of best management practices in livestock development and adjoining farming activities based on the available and future findings of applied research will be built-in the project development. In addition, the EA team has developed an environmental management plan that includes effective mitigation measures and environmental monitoring program, which has been incorporated into the project design documents and will be carried out by the PPMO and project implementation teams to reduce the other possible negative impacts to minimum.

To sum up, if successfully implemented, the proposed project would not only promote the local social and economic development, but would also increase the living standards of the framers. In the "with project" scenario, the impacts of the project on the natural environment are believed to be neutral, while the social and economic impacts appear to be highly positive. Please add any other project related information to support the "with Project" scenario.

83 7 Analysis of Environmental Impacts & Proposed Mitigation Measures Environmental effects can occur during Iboth the implementation/construction and operational phases of the project. This section identifies the main sources of effect for both phases of the proposed integrated pastoral development project, describes the predicted impacts from these activities, and then recommnends appropriate mitigation measures that should be adopted to minimize those impacts.

The EA team carried out a detailed environmental analysis of the proposed project counties located in both Gansu and XUAR. In addition' a separate analysis was made for proposed dairy subcomponent in Gansu to identify possible adverse impacts and propose future study programs. Since he exact location and size of the proposed dairy projects are not finalized yet, a more generic review of potential impacts is presented in this report and more detailed EA review will be required after finalization of location and size of the proposed projects.

The environmental impacts of the project can be divided into the reversible or irreversible according to the nature of the impact, and into the short-term and long-term according to the temporal horizon. The irreversible impact is mainly the permanent occupancy of land that might be brought about by the proposed project, potentially for the development medium and large-scale dairy farms, medium to large-scale feedlots, and potential reallocation of land for use as the artificial pasture for the breeding stations and as seed production farms, Al stations, and other infrastructures proposed under different project components. The short-term impacts include the tempdrary land occupancy, water pollution during construction of the faciiities, and minor noise and air pollution, sediment loading, etc. occurring during implementation/construction phase. The long-term impacts would mainly consist of cumulative and residual impact of medium to large-scale feedlots, medium to large-scale dairy farms (wastewaters from washing of milking equipment, solid/liquid waste, point source pollution of nutrient rich runoff, and point source pollution from the use of dipping; bath, potential application of agrochemicals on the water quality, flora and fauna within the river catchinents within the project area). 7.1 Potential Sources of Effect Potential sources of effect have been identified through review of project documents, feasibility studies and field visits by the EA team with respect to the enviromnental aspects that could potentially be affected. The available project information was also used to identify if any of the proposed construction/development activities could potentially cause environmental impacts, and the main identified issues are described below:

Access Roads: Although not specifically identified in the project design and/or feasibility documents, there might be a need to construct access roads, usually very short, to areas proposed for development of large feedlots, county and Howell dairy cattle farms, etc. The actual locations of the above facilities are not finalized in the feasibility reports and actual needs and total length of the access roads, if any, will only be known after finalization of the sites. Construction of dairy farms, warm and cool sheds for sheep farms (feedlots) might potentially need the construction of access roads, if the proposed sites are not already accessible to trucks and machinery that are required for the construction of such facilities, specially larger dairy farrns and their waste handling facilities. Even if access roads are available, there might be a need for road upgrades, on

84 a small scale, to allow machineries and equipment to be delivered to the propose county and dairy farm sites and the attached laboratories, and to haul the soil material from excavation of animal waste fermentation ponds, sedimentation tanks, etc.

Machineries: Machineries for construction work, especially for construction of dairy farms and appropriate waste management facilities, include cement mixer, excavator, vibrator, and trucks.

Irrigation Work: The proposed irrigation works for the establishment of artificial pastures in most irrigation areas are confined to the rehabilitation and completion of irrigation canals, on-farm works, and other minor irrigation infrastructure and/or construction of new irrigation wells in areas where groundwater would be used as main source of irrigation for irrigation of artificial grasslands. The irrigation requirement and size of individual construction activities are not identified to this date. However, the construction work is believed to be minor and based on discussions with county officials, the grassland management component team members, and feasibility study teams, will be mostly of rehabilitation type.

Temporary Land Occupancy and Labor Camp: During project construction, temporary land occupancy cannot be avoided. However, it is assumed that the labor camps during construction of dairy farms will be within the perimeter of the area earmarked for construction of the dairy cattle farm and no additional land will be occupied by the labor involved in construction of those projects. The same assumptions are made with regard to construction of warm shed, Al stations, laboratories, and other proposed infrastructure.

With regard to irrigation related construction, small parcels of land might be needed for temporary occupancy during rehabilitation of the canal systems, and construction of on- farm irrigation infrastructure. In the construction/rehabilitation of canals, mobile cement mixing plants and storing houses might be required, depending on the magnitude of construction/rehabilitation activities. It is assumed that houses will be rented from the local farmers for storage and it is also assumed that the majority of the labor force will be the project beneficiaries (livestock farmers) and there will be no need for the establishment or construction of labor camps within the project areas.

Public Water Supply: As the construction sites of irrigation construction, dairy farms, and feedlots (warm sheds, Als, etc.) are not far from residential areas or presently have potable water sources, potable water supply can be supplied by the water wells in the residential areas of the project beneficiaries. 7.2 Analysis of Environmental Impact & Proposed Mitigation Measures in implementation & Construction Phase, Gansu Adverse impacts of the project during implementation/construction phase are mainly of short-term variety such as temporary land occupancy, water pollution (potential sediment load increase), and minor noise and dust pollution. These impacts are not believed to be significant and no major impact/mitigation measure is envisaged during implementation activities if appropriate general design and construction practices are followed. However, if not managed on an environmentally sound basis, any project development activity, no matter how small or insignificant, could cause significant environmental impact. In the following sections, the major potential impacts and proposed mitigation measures (sound environmental management) are outlined.

85 7.2.1 Flora and Fauna Impact Analysis: During implementation/construction phase of the project, a certain amount of vegetation could be permanently or temporarily disturbed due to construction/rehabilitation of irrigation canals for artificial pastures, construction of dairy farm facilities, feedlots, animal sheds, potential road upgrading. As stated in Chapter 4, in most irrigation areas, vegetation is either croplands or are areas where pastures have been converted to croplands, but have been left idle for some time. The dominant species of wildlife are believed to be rabbits, various mice species, and other rodents usually of low protection levels. Therefore, no significant effect on vegetation and wild animals is envisaged in theses areas.

A number of nature reserves exist within the project counties. Since the final location of project sites are not yet finalized, it is imperative to ensure that none of the identified project sites are within the nature reserves. According to PRC laws any forms of manufacturing and economic activities are forbidden inside the buffer zone or core zone of nature reserves according to the Notice on FurtherStrengthening the Administration of Nature reserves in the People's Republic of China (The State Council, No.111, 1998). Therefore, before finalization of each specific project area in the proximity of nature reserves, the PMO must contact the responsible agencies (Forestry Bureau, Environmental Protection bureau, Agricultural Bureau, Animal Husbandry Bureau, etc.) to confirm the actual position of the project relative to!the natural reserve.

The potential adverse impacts of the construction and implementation activities entailed by the proposed project near nature reserves/habitats of wildlife are mainly reflected in the following aspects:

1) Increased possibilities of encroaching to the nature reserves and the habitats of wildlife within them during construction period; 2) Blockage of the travel/migrating routes of animals that drink and eat outside the reserves; 3) Directly destruct vegetation inside or outside the nature reserves; and Potential conversion of natural grasslands area, perceived to be low yielding, to artificial pastures.

Mitigation Measures: 1) During project plan and design, attention should be paid to avoiding environmental sensitive areas like nature reserves and wildlife habitats; 2) During preliminary design, the PPMOs should submit the project plans of the sub- projects near nature reserves and wildlife habitats to the appropriate lined agencies, responsible for administration of respective nature reserves for review and approval; 3) If construction machineries are used, they should be kept far from nature reserves and wildlife habitats; in case that construction activities near these areas cannot be avoided, effort should be made to reduce noise as low as possible; 4) No new land (forested or natural grassland) should be converted to artificial pastures. According to the PRC laws, conversion of natural grassland/forest to other uses is forbidden unless they are replaced by new forest/natural grassland within the neighboring areas. In other words, there should be "no net loss" of natural grassland or forest habitats; 5) Construction waste should be properly disposed to avoid any impact on the surrounding areas; and

86 6) PPMOs should enhance workers' awareness of protection of natural resources and wildlife, and provide necessary directions to prevent them from entering the buffer and core areas of the nature reserves, not to hunt wildlife and/or damage vegetation inside the reserves. If any rare or endangered (protected) plant species are present, the related PRC regulations should be followed and implemented. 7.2.2 Soil Erosion Impact Analysis: Soil erosion is the result of the long time combined impact of natural factors (wind and water) and is a necessary process in the formation of soils. However, the accelerated soil erosion, caused mainly by human activities is not only destroying the precious natural resource and dislodges the fertile topsoil, but also cause the development of sheet, rill and gully erosion that are unsightly and cause major economic loss.

Most project activities such as improvement of natural grasslands, and development of artificial grasslands, using perennial plants will not only reduce soil erosion, but will also improve water quality and sediment loads within surface water bodies.

Most of the proposed construction activities in the project involve only rehabilitation of existing irrigation facilities, no large-scale soil erosion is envisaged. However, some construction activities of the irrigated pasture sub-component may disturb the existing landform, especially in areas with already fragile soils do exist and damage to the vegetation cover could cause increased rate of soil erosion. The activities that potentially could cause soil erosion include cut and fill work associated with any new canal construction, construction of dairy farms (depending on topographic and soil condition) and excavation of waste treatment ponds.

Mitigation Measures: 1) After the canal construction is finished, on such canals that are designed in fill material, vegetation planting should be arranged to cover the exposed side slope. To get the best effect, the side slope plantation should be completed one month in advance to the rainy season; 2) During construction of hillside canals, cutting should be avoided during rainy days. Sand bag, silt fence and/or straw mat should be used to on the down slope side of cut areas to reduce soil erosion and prevent increase in river sediment load; 3) All cleared land should be planted as soon as possible to prevent soil loss by water and wind erosion and surface runoff during the rainy season; 4) During construction of dairy and breeding farms infrastructure, a plan for earth and stone borrowing and dumping should be prepared to keep a balance between filling and excavations to reduce waste material. The waste earth and stone chips, if cannot be used in construction, should be piled in designated areas and either be removed to dump sites or be compacted layer-by-layer and then be timely covered with vegetation; and 5) The excavated surface soil should be piled separately to be used as the raw materials for waste bank, canal embankment and farmland reclamation. 7.2.3 Acoustic Environment Impact Analysis: The main potential noise sources during construction are due to construction machinery and hauling trucks. Although the noise impact during construction period is temporary, the noise produced by machinery, if used in the project construction activities, is

87 characteristic of high sound intensity and irregularity, if not controlled, the machinery noise would have impact on the surrounding acoustic erivironment.

According to the attenuating model of point source noise, me estimated results of machine noise attenuating with distance are shown in Table 7-1.

Table 7-1 Estimated Noise Value of Construction Machinery Machinery Estimated Noise value dB (A) Description 5m lOm 20m 40m 50m 60m 80m | 100m 150m 300m Excavator 84 78 72 66 641 63 60 58| 55 47 Mixer 87 81 75 69 67 66 63 1 61 58 50 Bulldozer 86 80 74 68 66 65 62 1 60 57 49

According to GB12523-90 Noise Limit at Construction Site, the limits are 70 to 75dB(A) in daytime, 55dB(A) at night. The daytime noise produced by construction machinery is within the noise limits of GB12523-90 at locations 50rn from the construction site, while that of night are within the noise limits at locations 300m from the construction site. At night, the impact of construction machinery noise is more serious. Therefore, it is suggested that night construction should be as far as possible. The construction machinery operation site of fixed locations should be located in places where there are no schools or large residential areas within 300m from the operation site.

Mitigation Measures: 1) In order to prevent any noise related impacts and to follow the PRC's noise limit requirements, if there is residential areas within 300m of the construction site, construction activities are forbidden between 22:00 and 06:00 at night, and 12:00 to 14:00 in day time; the construction crews should comply with this regulation; 2) The access roads should be selected away from such sensitive locations as schools, residences and hospitals. When dense residences exist 50m within access road, night transportation is forbidden; 3) When the construction site is close to school, no construction work with heavy noise machines should be arranged at school time; when the construction site is close to densely populated residence, construction work with strong noise machines should not be arranged at nighttime.; and 4) The construction operator's work time should be arranged in accordance with the labor hygiene standard, and personal protection measures such as wearing earplugs and helmets, etc. should be provided to the operators. 7.2.4 Air Quality Impact Analysis: The only potential air pollutant in the construction and implementation period is the potential raised dust due to long duration and periodic occurrence of windy and dry days in Gansu that combined with the use of machinery, excavation activities (irrigation canals, dairy farm infrastructure development) and construction activities at feedlots (sheds, laboratories, buildings, etc.). The factor that should be considered is the total suspended particulates (TSP).

TSP pollution caused by the excavation and filling operations is closely related to the weather: The pollution is comparatively severe at the areas leeward to the construction sites in dry, windy weather condition, otherwise the state standards can be nornally maintained at the distances 50 to 500m from the construction sites.

88 During the construction period, the loading, unloading, and transport of construction materials will cause TSP pollution along the route. Based on the monitoring findings of similar conditions in construction sites, the concentration of TSP caused by transporting vehicle can exceed the Grade II standard by 10 time at a distance 50m leeward from the road side; the excess can be 4 times that of the required standard even at a distance 150m from the road side. This suggests that the flying-dust pollution caused by transport vehicle along the access roads could be serious during construction period, if construction is done during dry, windy days. However, as the distances from dust source increases, the concentration contribution will fade out quickly, such that at 300 meter from the construction site, it basically satisfies Grade II standards.

Mitigation Measures: 1) The mixing plants should be set up at the leeward side and 300m away from the sensitive locations of residences, hospitals and schools. The mixing plant should be equipped with sealing device, shock absorber and dust remover. Labor protection measures should be provided to the operators of the construction machine such as eye mask and mouth mask; and 2) Dirt roads used by construction and hauling machinery should be sprayed from time to time to prevent secondary dust flying. 7.2.5 Cultural Heritage Impact Analysis: Cultural relics can be divided into the existing on-ground historical sites and the underground cultural relics, which have not been unearthed. Generally speaking, the adverse impact on on-ground historical sites is either from the direct destruction activities of human or from air pollution such as acid rain and sulfur oxides. Since the proposed project is not associated with producing sulfur oxides or acid rain, no significant impact is envisaged in this aspect.

Breaking ground is the straightest way of destroying underground cultural relics. Since the construction activities with respect to artificial grassland sub-component are mainly a rehabilitation of the existing irrigation facilities and no new canals or deep cuts are involved during construction, no significant adverse impact on cultural relics is envisaged during project construction and implementation. However, construction workers involved in excavation of waste management infrastructure for proposed dairy farms should make sure to report to their supervisors if any artifacts are unearthed.

Mitigation Measures: 1) Construction workers should be trained on identifying cultural relics and the consciousness of protecting cultural relics prior to construction; 2) The PPMO should train its staff and the staff of CPMO by holding training courses on relics protection and spread propaganda among livestock farmers during project implementation; 3) During construction, if cultural relics are found, then construction should stop and the supervisory engineer/inspector should protect the site, and concemed department such as Provincial Cultural Relics Bureau should be notified. Construction/excavation could only start after the issuance of clearance from the lined agency.

89 7.3 Analysis of Environmental Impact & Proposed Mitigation Measures in implementation & Construction Phase, XUAR In general, the main environmental impacts of the project and the respective mitigation measures are similar between the proposed projects iniXUAR and Gansu with one exception that no dairy cattle farn project is considered in XUAR. Since the environmental impacts and mitigation measures identified for dairy projects are not relevant to the projects in XUAR, the environmental impacts of the project during construction and implementation will be even less severe in XUAR. 7.4 Analysis of Environmental Impacts & Proposed Mitigation Measures During Project Operation in Gansu Most of the social and environmental impacts of the project, if implemented successfully, should be positive. There are, however, a number of issues that if not well handled, might have potential adverse effects on both natural and social environments. The following sections aim at discussing such issues and identifying mitigation measures to prevent or reduce the potential negative impacts. In order to identify the potential environmental impacts of the proposed project and determine the most suitable mitigation measures, the project counties were divided into three principal groups based on the prevalent livestock production models in each county. The major livestock production models include; (a) semi-pastoral based development, (b) mixed semi-pastoral and agricultural based development, and (c) agriculture based (wholly pen-fed) development. If differences in major environmental impacts were recognized between different counties with the same production model, the project counties were further subdivided according their main ecological zoning. Potential environmental impacts for each ecological zone were then assessed and respective mitigation measures were recorded accordingly. 7.4.1 Semi-Pastoral Livestock Development Model Project counties/breeding farm in Gansu that are using semi-pastoral (grazing) production model include: Sunan county, and Huangcheng Sheep Breeding Farm.

A: Natural Grassland

Impact Assessment: The proposed project aims at improving the status of natural grasslands through use of different tools such as fencing to promote rotational grazing, reseeding with indigenous grass seed mixes, fertilizer application, etc., as appropriate. In addition, the grassland management component of the project promotes detailed and site-specific formulation of grassland management plans so as to ensure sustainable use of grassland. It also supports improvement of sheep breeds, being mutton sheep or fine wool sheep. At present, summer pasture is mainly located in alpine meadows with rather good quality and grassland degradation rates in the 10 to 20% range (Data obtained from remote sensing analysis of natural grasslands of Gansu). Winter pastures are mainly in sub-alpine meadow and temperate desert grasslands with relatively high nutrition. Grassland degradation in sub-alpine areas is around 30% and increases towards the temperate deserts. Weeds and poisonous grasses are increasing that could cause decrease in effective grass yield. Overgrazing appear to be an issue within the areas used for semi- pastoral livestock development and animal numbers appear to be over the canrying capacity, especially in winter grazing areas. Since the project does not promote any increase in the number of animals, its implementation should improve the status of grasslands and their carrying capacity and reduce grassland degradation rate. However,

90 to ensure the success of the project, it is imperative that the number of animals should not increase. Any increase in the number of animals, especially before improvement of degraded grasslands and increasing the natural grassland carrying capacity, could jeopardize the project success and would have detrimental environmental impacts.

Mitigation Measure: In order to ensure that the animal numbers will not increase during project implementation, it is necessary to strengthen the capability of the county level grassland monitoring stations (GMS) within the project counties to strictly enforce grassland laws and control the number and movement of animals in and between different grassland areas. The number of animals in the project areas should be kept at or below the grassland carrying capacity to prevent any further degradation of natural grasslands and to allow for their regeneration through implementation of project proposed community based grassland improvement plans.

B: Water resources and water quality

Impact Assessment: If project is implemented successfully, especially the grassland improvement component, presently degraded grassland should improve that should have a positive effect on both capacity of the grassland to retain surface runoff that should assist the groundwater recharge. Grassland improvement should also reduce surface erosion that should eventually improve surface water quality due to improved surface cover and reduction in accelerated soil erosion. It is, therefore, believed that successful implementation of the project should bring about positive impacts on surface water quality and quantity of groundwater within the project areas.

Mitigation Measure: Since the perceived impacts are positive, no mitigation measures are required.

C: Flora and Fauna and Nature Reserves

Impact Assessment: The proposed project, if successfully implemented, should improve the quality of natural grasslands and increase the carrying capacity of the natural grasslands. If the numbers of domesticated animals are kept constant at present levels, the improvement of natural grasslands should allow the wild herbivores, native to the project area, to flourish that could potentially improve or at least protect the fauna biodiversity within the project area. With regard to flora, reseeding of natural grasslands could change the grassland composition that can have positive or negative impacts on flora biodiversity based on the type of seed chosen for reseeding of natural grasslands and/or if use of chemical fertilizers on natural grasslands is proposed.

Mitigation Measure: In order to ensure that the project will have no negative impact on the project wild animals community, fencing activities, especially within summer pastures should be commenced only in areas where no herbivore wild animals, incapable of jumping the fence, are present. Where such animals are present, arrangement should be made to either have areas that are not fenced for coexistence of wild and domesticated herbivores, or assign certain areas of the natural grasslands/water holes for use of the wild animals.

91 With regards to floral biodiversity, utmost effort should be made to only use native seeds for reseeding of the natural pastures. Use of exotic grass seeds should not be promoted by the project. It is proposed to consider mapping of the seed banks within project natural grasslands and develop grassland specific seed mixes for reseeding of the natural grasslands. This should not only prevent any reductionlin floral biodiversity, but could also improve grassland nutritious capability and grassland biodiversity, if the well balanced natural seed mixes are collected.

Application of chemical fertilizers on natural grassland if not well planned, based on soil characterization and genuine need of the specific grassland area, could not only have significant negative impact on floral biodiversity, it could, in a long term, have a negative impact on grassland composition and floral biodiversityj. It is imperative that grassland management component of the project should include soil characterization as a prerequisite for recommendation of any 'fertilizer application and/or type of fertilizer to be used, if any, within natural grasslands.

D: Soil Erosion

Impact Assessment: Soil erosion severity varies within the project counties. For example, soil erosion within natural grasslands of Sunan County appears to be slightpto moderate, but the soil erosion levels in counties within Gannan Prefecture show severe sheet and gully erosion due to characteristics of soil parent material and the grassland management practices.

Proposed improved grassland management practices, proposed by the grassland management component of the project, combined with enforcement of grassland laws with regards to livestock numbers should improve the grassland conditions with resulting reduction of surface runoff and accelerated soil erosion., However, a number of proposed grassland improvement activities might have negative impacts on soils and grasslands condition that could cause increase in magnitude of soil, erosion within the natural grasslands. Fencing could have both negative and positive impacts on soil erosion status of the grassland areas. If properly managed and used for such management activities as fencing the degraded pastures to allow for regeneration of grasslands, it should have positive Impacts on soil erosion status. However, the iridiscriminant use of fencing, especially within summer pastures, could damage low quality grasslands and aggravate soil erosion within such areas. Conversion of idle lands (previously converted to farmlands) to artificial pastures, using perennial grasses, should also help reduce soil erosion, by reducing surface runoff. The development of artificial grasslands should also reduce pressure on natural pastures by providing supplemental food resources.

Mitigation Measure: To prevent project induced soil erosion, the project should make every effort to only use fencing where it is appropriate and do not allow indiscriminate use of fencing as a grassland improvement practice. Another major source-of soil erosion within natural grasslands is overgrazing and extra pressure on this fragile natural resource. In order to prevent over grazing, it is proposed to enforce grassland laws with regard to grassland carrying capacity and monitoring of number of animals. As was stated before, GMS should be strengthening through training and capacity building to enforce the grassland laws and to monitor the condition and regeneration of natural grasslands during project implementation and operation.

E: Soil pollution

92 Impact Assessment: Soil pollution due to extensive grazing of sheep and other small ruminants is not believed to be a significant issue in the semi-pastoral livestock development model since this model is mainly based on extensive movement of animals through large tracts of land and with the exception of winter months where animals might be pen fed, they are mostly roaming and no concentration of farmyard manure is anticipated.

The major project activities that might cause soil pollution include: rodent control, eradication of poisonous grass, and application of agrochemicals (fertilizers and pesticides) in natural grassland. The current pesticide application in project counties is shown in Table 7-2 while chemical fertilizer application in project counties is listed in Table 7-3.

According to discussions with county officials in Sunan County, undisclosed herbicides are being used to eradicate poisonous grasses, which might pollute soil and potentially water resources. In addition, undisclosed rodenticides are also used for rodent control within natural grasslands. According to the county officials rodent control in project areas is only carried out once every 5 years and the eradication of poisonous grasses is still at trial stage. Since the type and quantity of herbicides and rodenticides used cannot be disclosed at this point, the prediction of potential impact is difficult to predict. However, the project is not promoting the use of pesticides, herbicides or rodenticides and should not cause any significant negative impacts. Whenever the data on type and quantity of the above-mentioned agrochemicals used within the project area become available, the project should review their toxicity levels and if found extremely harmful to the environment (WHO's Category Ia), then the project should stop their use within the project areas.

Table 7-2 Pesticide Application in Project Areas in Gansu Pesticide WHO Application Amount conentrationo | Category Natural Grassland Alfalfa Com Location 85% Trichlorfon 11 1500 1000 1000 Sunan, Jingyuan 85% Dichlorvos lb 2000 2000 1500 50%/o Carbaryl 11 500 300-500 400 40% Dimethoate if 1500 300-500 400 500/o Malathion 111 1500 1000 1000 72% 2,4-D Ester II 750-1000. (milhm )_I Sunan, Zhouni, 20%2 ChoTine U 2500-3000 (m __hm_) Lintan 10% Glyphosate U 7500-11250 (g/hm) Phosacetim O _ Lintan, Zhouni

Table 7-3 Total Annual Fertilizer Application in Project areas in Gansu Type Sunan YongchangB| Jinyuan Lintan JZhouni

Metric Ton Urea 48.6 5212.2 10229.8 957.4 527.4 Ammonium nitrate 618.2 10356.4 4775.7 162.6 94.7 Ammonium carbonic 142.1 1238.8 5029.1i Ammonium sulphate 192.0 2816.0 2717.4 1804.8 629.8

Mitigation Measure: In general, the project does not have a significant impact on soils due to pollutants. Conversion of croplands to artificial pastures should reduce the use of agrochemicals

93 within the converted areas by almost half that should have positive impacts on the soil and water resources of the project areas.

An attempt should be made by the county PMOs to reduce the use of pesticides to minimum to prevent only the economic injury to the plants, and efforts to eradicate the pests should be strongly discouraged by the project proponents. Maximum application of organic manure should be encouraged to reduce application of chemical fertilizers. Low toxic and low residue pesticides and herbicides should be identified to replace high toxicity agrochemicals. Large-scale rodent control campaign and eradication of poisonous grasses should first be approved by environmental agencies (such as environment monitoring station at the provincial and county level), and be carried out strictly following relevant regulations to minimize the potential impact of agrochemicals on the environment while protecting the health of livestock farmers and herders.

Such activities and promotion of environmentally sound pasture and fodder development should be included in the job description of extension officers and, if necessary, appropriate training on best management practices should be provided to the county extension officers and GMS officers.

F: Land use

Impact Assessment: The only project activity that could cause a change land iuse in the project areas is the development of irrigated artificial grasslands. The area of artificial grassland within semi-pastoral livestock development model is limited to the winter pasture areas. Furthermore, artificial grasslands will be. mainly developed by converting croplands or previously converted grasslands (idle croplands) and should not cause any significant impact on present land use in project areas. The envisaged development of fodder crops should not cause any irreversible or significant impact on present land use either.

The development of artificial grassland in the project areas will be based on the balance of stock and grass availability and should increase feed supply and reduce pressure on natural grasslands, allowing them to regenerate. Therefore, artificial grassland development should play a positive role in the improvement of natural grassland and ecological environmental quality of the project areas. Establishment of artificial grassland in previously converted agricultural lands is also in line with PRC government policy of "returning farmland to grassland" plan. Artificial grassland will usually be established in flat areas with irrigation facilities, so "restored grassland from farmland" should be used as much as possible. According to SEPA regulations, it is prohibited to damage or convert any original grassland or forest area to other forms of land use. Even irrigation of natural grassland could be considered a change of land use and should be cleared with SEPA.

Mitigation Measure: Since the proposed project does not appear to have any significant impact on the present land use, no mitigation measures are proposed. However, it has to be emphasized that the proposed project activities, especially the development of artificial pastures must not encroach on any "virgin" natural grassland. The project proponents should not consider the conversion of natural grasslands, even the ones perceived to be low yielding. Such activity is against the environmental laws of the PRC and the project should strictly enforce the laws by carefully reviewing the characteristics and present land use of the areas earmarked for conversion to artificial pasture.

94 7.4.2 Semi-pastoral and semi-agricultural Livestock Development Model Project counties that mainly use semi-agricultural and semi-pastoral livestock development model include: Jingyuan, Kangle, Lintan, Linxia, and Zhouni. The project counties, using mix of grazing and pen deeding model are mainly located in three main ecological zones: the transition zone from arid agricultural areas (oasis) to desert areas (Jingyuan County), cold agricultural areas in Loess Plateau (Linxia and Kangle Counties), and cold agricultural and pasture region of Gannan Plateau (Lintan and Zhouni Counties).

The temperate desert and "semi-desert" grasslands in Jingyuan County are grazed all year round. Dry matter content of desert grasses is high (High dry to fresh grass ratio). The temperate desert grasses also have a very high nutritional value. Therefore, although the general appearance and vegetation density appear to be poor, small ruminants (shoats) thrive on this feedstuff. However, due to overpopulation of animals, most of these grasslands are moderately to severely degraded.

The cold agricultural grassland belongs to sub-alpine meadow (Linyuan and Dalijia Mountains), and secondary shrub meadow (lower slopes of Lianghua Mountain in Kangle). Grasses are tall and their population density is high. The grass biodiversity within these areas is high and many different varieties of grass are present. Within the Gannan plateau, alpine and sub-alpine meadow grassland dominates. The grass biodiversity is rather high, however, the palatable grass communities are decreasing and grass yield has a downward trend. Grasslands show severe degradation and the population of poisonous grasses are on the rise.

A: Natural Grassland

Impact Assessment: The proposed project aims at improving the status of natural grasslands through use of different tools such as reseeding with indigenous grass seed mixes, fertilizer application, fencing, etc., as appropriate. In addition, the grassland management component of the project promotes detailed and site-specific formulation of grassland mnanagement plans so as to ensure sustainable use of grasslands. It also supports improvement of sheep breeds, being mutton sheep or fine wool sheep. At present, natural pasture is mainly used in combination with other feed forms such as cut and carry, forage and fodder. At present, natural grasslands degradation is quite high within these areas due to overgrazing and extra pressure on natural grasslands. Weeds, poor (low nutrient) grasses, and poisonous grasses are increasing that could cause decrease in effective grass yield. Overgrazing appears to be an issue within these areas and animal numbers appear to be over the carrying capacity. Since the project does not promote any increase in the number of animals, its implementation, especially development of artificial pastures to provide additional, nutritious livestock feed, should improve their status reduction in grazing pressure on natural grasslands. However, to ensure the success of the project, it is imperative that the number of animals should not increase. Any increase in the number of animals, especially before improvement of degraded grasslands and increasing the natural grassland carrying capacity, could jeopardize the project success and would have detrimental environmental impacts.

Mitigation Measure: In order to ensure that the animal numbers will not increase during project implementation, it is necessary to strengthen the capability of the county level grassland monitoring stations (GMS) within the project counties to strictly enforce grassland laws and control the number and movement of animals in and between different grassland

95 areas. The number of animals in the project areas should be kept at or below the grassland canrying capacity to prevent any further degradation of natural grasslands and to allow for their regeneration through implementation ofproject proposed community based grassland improvement plans.

B: Water resources and water quality

Impact Assessment: The artificial pasture development requires a rather large quantity of water for irrigation purposes. Other than the artificial pastures, no other major impact on water resources is anticipated. The total area assigned by the project for development of artificial pastures within this livestock development-area is about 10,000 ha (150,000 mu). The areas allocated for artificial pasture development are mainly the areas that are presently used as cropland or previously converted grasslands that are left idle. Considering the average water requirements of alfalfa, the main forage species identified for use in the artificial pasture areas, the estimated total irrigation water requirement of alfalfa from seeding to first cut is in the 450 to 550 mm/ha or 4,600 to 5,500 ml of water. According to Arnon (1972)'7, the amount of water required for alfalfa, with overhead irrigation, vary from 1,000 to 2,000 mm, depending on climatic conditions. When the water is applied by flooding, the amount of water required is about 20% more. Considering that the present crops in the project area that are being converted to artificial pastures on average use 250 to 350 mm per cropping season, the increase in crop water requirement appears to be very significant and utmost care must be taken to prevent overexploitation of surface and grouridwater resources, especially in projects within oasis and temperate desert areas where water shortage is an apparent problem.

Mitigation Measures: Sustainable use of water resources within project areas is vital for the success of the proposed grassland improvement and livestock developrment project. In order to ensure the viability and sustainability of the project it is necessary to obtain all available surface and ground water data within the project areas and a detailed water balance study be completed, especially within apparent water deficit areas before investment into artificial pasture development, using alfalfa as the main crop is commenced. The project proponents should also consider other, less water demanding, annual forage crops such as hybrid sorghum, highland barley, and oat, depending on project location and climatic conditions. Crop water requirements should be calculated for each climatic zone based on soil and climatic characteristics, and more efficient irigation system than the customary flood irrigation should be considered to reduce water demands. It is also proposed to include development of natural pastures in grassland areas previously converted to agricultural land and since been left idle and such areas on sloping hilly slopes to reduce animal feed pressure and potentially reduce the area of irrigated pasture, especially in areas with potential shortage of water resources for irrigation of artificial pastures.

C: Flora and Fauna and Natural reservation

Impact Assessment: The proposed project, if successfully implemented, should improve the quality of natural grasslands and increase the carrying capacity of the natural grasslands. If the numbers of domesticated animals are kept constant at present levels, the improvement of natural

17 Arnon, A. 1972. Crop Production in Dry Regions, Volume 2: Systematic Treatment of the Principal Crops. Leonard Hill Books.

96 grasslands should allow the wild herbivores, native to the project area, to flourish and potentially improve or at least protect the fauna biodiversity within the project area. With regard to flora, reseeding of natural grasslands could change the grassland composition that can have positive or negative impacts on flora biodiversity based on the type of seed chosen for reseeding of natural grasslands and/or if use of chemical fertilizers on natural grasslands is proposed.

During pen feeding periods, livestock feed mainly originates from the use of artificial pastures and fodder crops that are developed in previously cropped areas, cut and carry, and agricultural by-products. Therefore, there should not be any direct impact on natural grasslands and/or the native flora.

Mitigation Measures: Although there are nature reserves in project counties (the list of nature reserves and animals and plants to be protected are provided in Chapter 4), the locations of artificial grassland and for other project activities are far from nature reserves buffer and core areas and no project impact is foreseen.

In order to ensure that the project within natural grasslands will have no negative impact on the project wild animals community, fencing activities, especially within summer pastures should be commenced only in areas where no herbivore wild animals, incapable ofjumping the fence, are present. Where such animals are present, arrangement should be made to either have areas that are not fenced for coexistence of wild and domesticated herbivores, or assign certain areas of the natural grasslands/water holes for use of the wild animals.

With regards to floral biodiversity, utmost effort should be made to only use native seeds for reseeding of the natural pastures. Use of exotic grass seeds should not be promoted by the project. It is proposed to consider mapping of the seed banks within project natural grasslands and develop grassland specific seed mixes for reseeding of the natural grasslands. This should not only prevent any reduction in floral biodiversity, but could also improve grassland nutritious capability and grassland biodiversity, if the well balanced natural seed mixes are collected.

Application of chemical fertilizers on natural grassland if not well planned, based on soil characterization and genuine need of the specific grassland area, could not only have significant negative impact on floral biodiversity, it could, in a long term, have a negative impact on grassland composition and floral biodiversity. It is imperative that grassland management component of the project should include soil characterization as a prerequisite for recommendation of any fertilizer application and/or type of fertilizer to be used, if any, within natural grasslands.

No impact is foreseen within areas earmarked for the development of artificial pastures. Therefore, there will be no need for any mitigation measures within these areas. However, use of farmyard manure and leguminous plants such as alfalfa will improve soil fertility in the artificial pasture areas that should assist the increase in soil fauna population.

D: Soil Erosion

Impact Assessment:

97 Soil erosion severity varies within the project counties., For example, soil erosion within natural grasslands of Jingyuan County appears to be slight, but the soil erosion levels in Lintan and Zhouni counties within Gannan Prefecture show severe sheet and moderate gully erosion due to characteristics of soil parent material, shallow depth of soil over parent rock, and the grassland management practices (oyergrazing, long grazing season).

Proposed improved grassland management practices, proposed by the grassland management component of the project, combined with enforcement of grassland laws with regards to livestock numbers should improve the grassland conditions with resulting reduction of surface runoff and accelerated soil erosion.: However, a number of proposed grassland improvement activities might have negative impacts on soils and grasslands condition that could cause increase in magnitude of soil erosion within the natural grasslands. Fencing could have both negative and positive impacts on soil erosion status of the grassland areas. If properly managed and used for such management activities as fencing the degraded pastures to allow for regeneration of grasslands, it should have positive impacts on soil erosion status. However, the indiscriminant use of fencing, especially within summer pastures, could damage low quality grasslands and aggravate soil erosion within such areas. Conversion of idle lands (previously converted to farmlands) to artificial pastures, using perennial grasses should also help reduce soil erosion, by reducing surface runoff. The, development of artificial grasslands should also reduce pressure on natural pastures by providing supplemental food resources.

Since the areas that are earmarked for establishment of artificial pastures are generally on flat land (less than 2% slope), no significant accelerated soil erosion is anticipated within areas assigned for the development of artificial pasture.

Mitigation Measures: To prevent project induced soil erosion, the project should make every effort to only use fencing where it is appropriate and do not allow indiscriminate use of fencing as a grassland improvement practice. Another major source of soil erosion within natural grasslands is overgrazing and extra pressure on this fragile natural resource. In order to prevent over grazing, it is proposed to enforce grassland laws with regard to grassland carrying capacity and monitoring of number of animals. As was stated before, GMS should be strengthening through training and capacity building to enforce the grassland laws and to monitor the condition and regeneration of natural grasslands during project implementation and operation.

E: Soil pollution

Impact Assessment: Proposed artificial pastures will cover some 10,000 ha of land that is presently used for crop production under irrigation. The conversion of croplands to irrigated pasture should reduce the application of fertilizers and pesticides by 40% and 50%, respectively that should improve environmental quality of the soils of the project areas.

The major project activities that might cause soil pollution include: rodent control, eradication of poisonous grass, and application of agrochemicals (fertilizers and pesticides) in natural grassland. The current pesticide application in project counties is shown in Table 7-4while chemical fertilizer application in project counties is listed in Table 7-5.

98 The type and quantity of herbicides and rodenticides used for control of rodents and poisonous grasses cannot be disclosed at this point, the prediction of potential impact is difficult to predict. However, the project is not promoting the use of pesticides, herbicides or rodenticides and should not cause any significant negative impacts. Whenever the data on type and quantity of the above-mentioned agrochemicals used within the project area become available, the project should review their toxicity levels and if found extremely harmful to the environment (WHO's Category Ia), then the project should stop their use within the project areas.

Table 7-4 Pesticide Application in Project Areas in Gansu Pesticide WHO Applicaion A_mot (concentration) Category Natural Grassland Alfalfa Com Location 85% Trichlorfon If 1500 1000 1000 Jingyuan 85% Dichlorvos lb 2000 2000 1500 50% Carbary II 500 300- 400 500 40% Dimethoate 1I 1500 300- 400 500 50%/o Malathion Hi 1500 1000 1000 72% 2,4-D Ester 11 750-1000, ml/hmI2 Untan, Zhouni 20/*2 Chorine U 2500-3000, Uhm _ 10% Glyphosate U 7500-11250, ghm2 Phosacetim 0 , Kangle, Lintan, Linxia, Zhouni

Table 7-5 Fertilizer Application in Project areas in Gansu Type Jingyuan Lintao Linxia Kangle Lintao Zhouni

Urea 10229.8 7741.4 2129.9 1088.0 957.4 527.4 Anumonium nitrate 4775.7 1221.0 6241.3 4916.5 162.6 94.7 Amimonium carbonic 5029.1 2543.4 526.1 275.2 Ammonium sulphate 2717A. 3809.3 203.5 618.2 1804.8 629.8

Mitigation Measures: In general, the project does not have a significant impact on soils due to pollutants. Conversion of croplands to artificial pastures should reduce the use of agrochemicals within the converted areas by almost half that should have positive impacts on the soil and water resources of the project areas.

An attempt should be made by the county PMOs to reduce the use of pesticides to minimum to prevent only the economic injury to the plants, and efforts to eradicate the pests should be strongly discouraged by the project proponents. Maximum application of organic manure should be encouraged to reduce application of chemical fertilizers. Low toxic and low residue pesticides and herbicides should be identified to replace high toxicity agrochemicals. Large-scale rodent control campaign and eradication of poisonous grasses should first be approved by environmental agencies (such as environment monitoring station at the provincial and county level), and be carried out strictly following relevant regulations to minimize the potential impact of agrochemicals on the environment while protecting the health of livestock farmers and herders. Such activities and promotion of environmentally sound pasture and fodder development should be included in the job description of extension officers and, if necessary, appropriate training on best management practices should be provided to the county extension officers and GMS officers. The best way to ensure that livestock farmers do follow the best

99 agronomic and soil management practices is to strengthen the capacity of county agricultural extension officers, by providing them adequate training on the best irrigation, soil and agronomc management practices. It is also proposed to review soil characteristics, especially within areas that show signs of salinity/sodicity such as Jingyuan, and/or areas that have relatively high evapotranspiration rates. In such areas, soil and water quality should be analyzed to ensure that soil degradation due to change in cropping and irrigation pattern does not occur. It is important to remember that,alfalfa is highly sensitive to soil salinity and fluctuating high water table, and its development within such areas could have significant negative impacts on soil and plant communities.

F: Land use

Impact Assessment: Major project activities that might impact land use within project counties are improvement of natural pastures and establishment of artificial pastures. Since all areas earmarked for conversion to artificial pasture are presently used for agricultural production, no major land use change is,foreseen. The improvement of natural grasslands should also have no impact on present land use.

Mitigation Measures: No mitigation measures are required. 7.4.3 Intensive (pen-fed) Livestock Development Model Project counties/breeding farm in Gansu that are using intensive (mainly pen-fed) production model include: Jiuquan, Zhangye, Liangzhou, Yongchang, Dingxi, Lintao, Provincial Poultry Breeding Farm (Jingtai), Lanzhou Hovill Group (Yongdeng), Qingshui, Mingshan Livestock Breeding Farm (Mingxiaj.

A: Water resources and water quality

Impact Assessment: Artificial grassland and fodder development will use a relatively large volume of water, especially in the dryer and warmer areas with high evapotranspiration rates. The estimated total area of artificial grassland proposed for development within the intensive livestock development county is rather large and amounts to some 20,076 ha (301,140 mu). According to the feasibility study report, the areas considered for conversion to artificial grassland are mainly presently farmed areas and no new natural pasture areas are considered for artificial grassland development.

Although many major river systems such as Yellow River, Black River, and Shule River flow through these farming areas, due to intensive use of water resources (both surface and groundwater), care must be taken to 'ensure that water needs of downstream users and minimum river flow requirement are considered in the development of surface water utilization plans for this project. Based on discussions with local authorities, field visits, and discussions with local farmers, the pressure on water resources has been increasing alarmiingly in the last 30 years, and groundwater table has fallen sharply in a number of project areas including, Dingxi, Lintao, and Jiuquan. The available data on water resources within the project areas, both water quality and quantity of the resources are scarce and no conclusive statement with regard to availability of water resources on a sustainable basis could be made at this point. In order to ensure sustainability of the proposed development project with regard to artificial pasture development and feed

100 availability, it is proposed to include water balance studies as a prerequisite to the loan approval process at county level.

Mitigation Measures: In order to ensure availability of water resources within the intensive, pen-fed livestock development areas, all water resources data should be availed to the project feasibility teams to determine the final feasibility and sustainability of the proposed artificial pasture development sub-component. If data is not available (accessible), the feasibility team should collect original data and ensure that available water resources are adequate for the sustainable development of the project without having negative impacts on downstream water users. More efficient irrigation methods should be considered. Strengthening of the capabilities of the county agricultural extension officers on more efficient irrigation methods and dissemination of the information to livestock farmers involved in developing artificial pastures and fodder fields should be considered as potential component of the training and extension sub-components of the project. Use of other varieties of forage and fodder crops more suited to arid areas with lower irrigation water demand such as hybrid sorghum and drought resistant varieties of alfalfa (Medicago sativa and Medicago falcata) varieties with lower water demand should be considered as altematives to fodder com and alfalfa. Research in many parts of the world had shown that alfalfa, especially at its latter stages of life and can deplete soil moisture to a depth of 4 to 5 m, and even 7 m if kept for 6 years. The average irrigation water requirement of alfalfa is about 450 to 550 mm per hectare under flooding from seeding to first cut, and is 300 to 350 mm, using sprinkler irrigation. Compared with sorghum, wheat, barley, oat, rapeseed, and com, the irrigation water requirement of alfalfa is much higher and this fact should be considered before finalizing the crop types to be planted as forage and fodder crops in the artificial pastures. The main mitigation measures to reduce the impact on depleting water resources, therefore, are use of drought resistance forage and fodder crop varieties, and use/promotion of more efficient irrigation systems through strengthening of agricultural extension departments, especially in water deficit counties. It is also proposed to include development of natural pastures in grassland areas previously converted to agricultural land and since been left idle and such areas on sloping hilly slopes to reduce animal feed pressure and potentially reduce the area of irigated pasture, especially in areas with potential shortage of water resources for irrigation of artificial pastures.

B: Flora and Fauna and Nature Reserves

Impact Assessment: Although there are nature reserves in project counties (the list of nature reserves and animals and plants to be protected are provided in Chapter 4), the locations of artificial grassland and for other project activities are far from nature reserves buffer and core areas and no project impact is foreseen.

The intensive (pen-fed) livestock development model is mainly based on use of artificial pastures and fodder crops that are developed in previously cropped areas, cut and carry, and agricultural by-products. Therefore, there should not be any direct impact on natural grasslands and/or the native flora. The impact on the animals should also be negligible since no new area that is used by wild animals will be converted for forage/fodder production.

Mitigation Measures:

101 Since no impact is foreseen, there will be no need for any mitigation measures. However, use of farmyard manure and leguminous plants such as alfalfa will improve soil fertility in the artificial pasture areas that should assist the increase in soil fauna population.

C: Soil Resources

Impact Assessment: Since the feedstuff for the pen-fed livestock development model comes from agricultural by-products, fodder and forage crops, the project impact on soil resources is only originating from activities in connection with irrigation of artificial pastures. Proposed artificial pastures will cover some 15,000 ha of land that is presently used for crop production under irrigation. The conversion of croplands to irrigated pasture should reduce the application of fertilizers and pesticides by 40% and 50%, respectively that should improve environmental quality of the soils of the project areas. The current pesticide application in project counties is shown in Table 7-6while chemical fertilizer applications in project counties is listed in Table 7-7

Table 7-6 Pesticide Application in Project Areas in Gansu Pesticide WHO Application Amount (concentraion) I Category Natural Grassland Alfalfa Comr Location 85% Trichlorfon if 1500 1000 1000 Jiuquan, Zhangye, 85% Dichlorvos lb 2000 2000 1500 Lingzhou, Lintao 50% Carbary 1I 500 300-500 400 400/%Dimethoate 11 1500 300-500 400 50% Malathion 1500 1000 1000 72% 2,4-D Ester If 750-1000, ml/hm Dingxi 20%2 Chlorine u 2500-3000, mnhml I10% Glyphosate u 7500-11250,.g/hm

Table 7-7 Fertilizer Application in Project areas in Gansu Type Jiuquan Zhangye I Liangzhou Yongchang IDingxi Jingtai Yongdeng Qingshui Mingxia Metric Ton Urea 18882.6 29304.3 77867.5 5212.16 3745.3 6735.4 2539.5 6858.2 3105.3 Ammonium 19814.4 16385.3 25472.0 10356.4 7356.3 1111.0 6521.9 9145.6 679.7 nitrate ______Ammonium 4232.96 25754.9 4672.0 1238.84 2289.9 409.6 1090.6 3275.5 270.1 carbonate I Ammonium 14465.3 20384.0 32236.8 2816.0 2273.3 2517.8 1816.3 1661.4 2032.6 sulphate

Irrigation of artificial pastures, however, could have negative impact on soil resources, if proper soil and agronomic management practices are not followed. Indiscriminant irrigation of dryer, warmer areas, especially within Northwestern portions of Hexi corridor could induce occurrence of secondary (irrigation induced) soil salinity and sodicity. If adequate drainage and leaching water requirement is not provided within areas with high evapotranspiration and/or heavy soils, the possibility of potentially having negative impact on soil resources increases.

Mitigation Measures: In order to reduce potential impact of agrochemicals on soil characteristics and water pollution, it is recommended to follow the best management practices for agrochemical application by reducing the chemical application rates to a level that prevent economic injury to the plants rather than trying to completely eradicate the crop pests that could not

102 only harm other beneficial soil fauna, but also have negative impact on terrestrial fauna and humans. All attempts should also be made to identify alternative less toxic pesticides with a shorter half-life to reduce their negative, long-term impact. The best way to ensure that livestock farmers do follow the best agronomic and soil management practices is to strengthen the capacity of county agricultural extension officers, by providing them adequate training on the best irrigation, soil and agronomic management practices.

It is also proposed to review soil characteristics, especially within areas that show signs of salinity/sodicity such as Jiuquan, and/or areas that have relatively high evapotranspiration rates. In such areas, soil and water quality should be analyzed to ensure that soil degradation due to change in cropping and irrigation pattern does not occur. It is important to remember that alfalfa is highly sensitive to soil salinity and fluctuating high water table, and its development within such areas could have significant negative impacts on soil and plant commnunities.

D: Land use

Impact Assessment: The only perceived impact of the project on land use is the conversion of some 15,000 ha of agricultural land to artificial pasture. Such a change does not impose any significant change in the general land use classification in the project areas.

Mitigation Measures: Since no significant impact on land use is envisaged, due to the development of the proposed project, no mitigation measures are proposed. 7.4.4 Diary Cattle proj.ect The project areas that in addition to small ruminants are involved in the dairy cattle production subcomponent are located in Lintao, Dingxi, Linxia, . In addition, Hovill Dairy Company in Lanzhou (Yongdeng) is also heavily involved in this activity. All cattle will be pen-fed. The proposed total number of project-financed dairy cattle is 2,450. Cattle feeding methods in the project areas and analysis of environmental impact are summarized in the following flow chart.

The dairy farms could be divided into three types: the smallholder dairy cattle farms with project investment adequate for the purchase of one dairy cattle, medium scale, county operated dairy cattle farms with 50 dairy cattle per farm, and one large scale dairy cattle farm with 200 dairy cattle, operated by the Hovill dairy Company. None of the farm locations are finalized yet and detailed environmental assessment of the proposed dairy operations is not possible. However, based on operation sizes, a series of potential impacts and respective mitigation measures are identified and a list of requirement regarding location of the dairy farms are presented as the guideline for finalizing the location of the farms.

Smallholder Dairy Cattle Farms: The smallholder dairy farms are not believed to cause any significant environmental impact. The project will only finance one dairy cattle per household. Farmers might potentially have other cattle in their households and should consider appropriate manure management practices. They should ensure that manure (both solid and liquid) is collected for use as either farmyard manure or for cooking/biogas development. If the farmers purchase small biogas plants, they should prepare a plan to also use the slurry as fertilizer in their farms. As is shown in Figure 7-1, the impact of the smallholder dairy

103 farms on the natural environment is insignificant and as' long as they follow the above practices, they should not produce any significant environmental impact.

Medium-Scale (50 dairy cattle) farms: The medium scale dairy cattle farms wili produce significant amount of manure and sewage from washing the facilities, milding activities and to a lesser degree, chemicals used for disinfections. Beside the produced sewage and manure, such farns will also produce unpleasant odor that could negatively impact local residents if the farm site is located within 500 m of residential areas.

Produced manure and the sewage produced through washing of milking facilities and milking activities are the most significant environmental impacts of the medium-scale dairy farms. To treat the manure and sewage water the project proponents have proposed construction of settling ponds and sedimentation tanks, respectively. However, the review of the proposed plans revealed that the proposed,treatment structures are extremely under designed, sometimes by more than ten times. Before the medium scale dairy farms could be approved for financing, the project proponents should revisit the size of the proposed waste treatment plants and come up with appropriate sizes to collect and store the large volume of manure and waste water that is produced on a daily basis until fermentation is completed and buyers for the processed mnanure are identified. It should be noted that manure cannot be applied to agricultural fields on a continuous basis and buyers/users will be available only at certain times of the year, before seeding and at specific times during crop growth and sedimentation ponds should be designed to keep the manure for the required period. Treated wastewater could be either used for irrigation of agricultural farms, or could be discharged to the surface water bodies.

Another issue is the availability of secure and adequate source of food supplies of high nutritional quality for the high yielding dairy cattle. According to the reviewed plans, none of the medium scale dairy farms own artificial or ratural pasture and all the feed should be purchased. It is not only important to ensure the availability of adequate food supplies, but the project financiers should also make sure that the proposed project does not cause unreasonable pressure on food supply availability within the project counties. Such pressure could potentially increase the price of feed materials, not only for the proposed enterprise, but also the local farmers who might not have the same financial power.

Large Scale Hovill Dairy Company Muliiplication Farm: Hovill is proposing to establish a 200 dairy cattle multiplication farm and supplying 1,200 dairy cattle to smallholder dairy farmers. In addition eight milking stations and 10 milk collection centers in the five project counties are planned. A milk quality control center is also planned under Hovill Dairy Company plans. The environmental issues with regard to the Hovill Dairy Company operations are similar, but at a higher potential impact risks. The milking stations, and to a lesser degrees milk collection stations, will produce large amounts of waste water from washing the milking equipment and milking facilities and minor amounts of disinfecting chemicals. It is necessary for Hovill Dairy Company to provide detailed and costed design, drawings and sizing-for the wastewater treatment plans (sedimentation tanks) and manure collection (fermentation) ponds that will be adequate for the approved size of the enterprise. The presently proposed designs are highly under sized and must be amended before approval of the plans.

104 Another important issue, as was discussed under medium scale dairy operations is the feed source, its availability, and potential impact of large demand for feed on feed cost increase that could have more impact on small scale livestock farmers.

According to relevant regulations of SEPA, detailed studies have to be undertaken with regard to proposed location of the dairy farm, project design, waste treatment facilities, etc. prior to deternination of the potential environmental impact of dairy projects and, their approval. At present, the relevant information with regard to location, size of the operation and final project design plan are not available to satisfy SEPA's requirements. Therefore, the environmental feasibility of the proposed Hovill Dairy Company project activities cannot be determined. The environmental risk of the proposed project requires an individual EA to be conducted when all the infornation is available.

General Requirements for selecting location of Dairy Farms: Before selecting the location of any medium to large-scale dairy farm operation, the following principles must be considered:

1. The Proposed dairy farm must be located at least 500 m from any source of drinking water such as wells, springs, or water bodies;

2. Sewage of dairy farm must not be discharged to inland rivers and their tributaries. After treatment of the wastewater and meeting the discharge standard of SEPA, the treated sewage can be used for irrigation.

3. Treatment of cattle manure must strictly follow relevant SEPA regulations.

4. The location of the dairy farm must be at least 1,000 meters away for residential areas to avoid the impact of odor. 4. The location of the dairy farm must be at least 1,000 meters away for residential areas to avoid the impact of odor.

5. The identification of location and construction plan can only be finalized after an individual environmental impact assessment is completed and approved by SEPA.

105 Major Environmental Impacts & Mitigation Measures, Dairy Subcomponent. IPDP in Gansu

Medium Scale Dairy Farm Cattle Raising by Farmer Households

Scale and Location: (total 2,000 heads) Medium-scale dairy farms: .Titquan: 100 Farmers, 100 Cattle 5 dairy farms with 100 cattle in each of Dingxi: 300 Farmers, 300 Cattle Dingxi, Linxia and Lintan counties Lintao: 1000 Farmers, 1000 Cattle Hovill Dairy Company will set up a dairy Linxiao: 200 Farmers, 200 Cattle farm with 200 cattle in Shuping Village, Lintan: 200 Farmers, 200 Cattle Yongchang County Hovill: 200 Farmers, 200 Cattle

Major Environmental Issues: Manure Major Environmental Problem: Manure and other sewage Farmyard Manure; Sewage generated in the milking process Sewage generated in the milking processing; and Pollution caused by disinfections chemicals Pollution caused by disinfections chemicals.

Major mitigation measures: Using Lintao as an example: Major mitigation measures: Construction of cement manure tank or-biogas digester; Major mitigation- measures: -- Construction of biogas digester;- Use of slurry from biogas digester as fertilizer; Construction of cement or clay-lined manure Use of manure as farm organic fertilizer; Use of manure as farm organic fertilizer; pool/ biogas digester Reducing sewage discharge; and Sewage treatment; Use of treated manure as farm organic fertilizer Use of slurry from biogas digester as fertilizer. Use of treated sewage for irrigation; and Sewage treatment (sedimentation tanks) Proper disposal of chemicals. Use of treated sewage for irrigation Proper disposal of chemicals _ Environmental Impact Analysis: Rational use of farmyard manure and Environmental Impact Analysis: l slurry from biogas digester as fertilizer will Rational use of manure as fertilizer should have Environmental Impact Analysis have positive impact to the environment. positive impact on soil environment. Rational use of manure as fertilizer will have Due to low volume, the impact of sewage The impact of properly treated sewage from dairy positive impact to the environment. on environment is insignificant. farms is not significant as long as proper sewage The impact of treated sewage on environment is treatment and application procedures are followed. insignificant.

106 7.5 Analysis of Environmental Impacts & Proposed Mitigation

Measures in XUAR

One of the principal objectives of the project is to improve sheep breeds, while keeping the total stock number unchanged. In addition, the grassland management component of the project requires planning and implementation of site specific, community based, grassland management plans to provide for improvement of grassland condition and ensure sustainable use of grassland. Therefore, most of the social and environmental impacts of the project, if implemented successfully, should be positive. There are, however, a number of issues that if not well handled, might have potential adverse effects on both natural and social environments. The following sections aim at discussing such issues and identifying mitigation measures to prevent or reduce the potential negative impacts. In order to identify the potential environmental impacts of the proposed project and determine the most suitable mitigation measures, the project counties were divided into two principal groups based on the prevalent livestock production models in each county. The major livestock production models include; (a) semi-pastoral based development, and (b) agriculture based (wholly pen-fed) development. If differences in major environmental impacts were recognized between different counties with the same production model, the project counties were further subdivided according their main ecological zoning. Potential environmental impacts for each ecological zone were then assessed and respective mitigation measures were recorded accordingly.

Project activities that might cause impact to natural grassland mainly include fencing activities, rodent, grasshopper and poisonous grass control, artificial grassland development and associated irrigation infrastructure rehabilitation. 7.5.1 Semi-Pastoral Livestock Development Model Project counties/breeding farm in XUAR that are using semi-pastoral (grazing) production model include: Altai City, Fuhai, and Fuyun counties in Altai Prefecture, Fukang, Jimusaer, Jichang, Hutubi, Manasi, Shawan, Wusu and Qitai counties in the northem slope of Tian Shan and the southem part of Zhungeer Basin, Hecheng, Xinyuan, Zhaosu, Tekesi, Gongliu, Chabuchar, Bole, Wenquan counties and Gongnai Stock Farm in Yili Valley and Boertala Prefecture, Emin, Taicheng, and Yumin counties and Taicheng Sheep Stock Farm in Tae Basin, and Hejing, Yanzhe, Kuche, Baicheng, and Wenshu counties and Bazhou Sheep Stock Farm in Southem slope of Tianshan Mountains.

A: Natural Grassland

Impact Assessment: The proposed project aims at improving the status of natural grasslands through use of different tools such as fencing to promote rotational grazing, reseeding with indigenous

108 grass seed mixes, fertilizer application, etc., as appropriate. In addition, the grassland management component of the project promotes detailed and site-specific formulation of grassland management plans so as to ensure sustainable use of grassland. It also supports improvement of sheep breeds, being mutton sheep or fine wool sheep.

The present condition of natural grassland and their degradation status varies within different regions using the semi-pastoral livestock development model. In the following section, the degradation status of different grasslands, based on remote and site-specific formulation of grassland management plans so as to ensure sustainable use of grassland. It also supports improvement of sheep breeds, being mutton sheep or fine wool sheep.

The present condition of natural grassland and their degradation status varies within different regions using the semi-pastoral; livestock development model. In the following section, the degradation status of different grasslands, based on remote sensing interpretations is presented to assist further discussion of potential environmental impacts of the proposed project.

Altai area: Summer and transition pastures are mainly within the high alpine and alpine meadows and have a relatively good quality with low weed population. The spring- autumn and winter pastures are located within the steppes and temperate desert grasslands and show signs of grassland degradation. According to the available data, as high as 80% of the grasslands within these areas show different degrees of degradation, while 33% of the area is considered to be seriously degraded and grass yield has dropped by 30 to 60% compared to the data available from the 1960s.

Northern Slopes of TianshanMountain and Zhungeer Basin: Grazing within this area mainly depends on the natural grassland on the northern slope of Tianshan Mountain. Based on available remote sensing data, over 80% of the grasslands within these areas show some degree of degradation, while about 1/3 of grassland has seriously degraded. Although summer pasture quality appears to be quite good signs of overgrazing can be commonly observed. Large tracts of degraded grassland have been observed within spring-autumn and winter grasslands. The grass yield in warm season has dropped by 20- 50% while it has dropped even more by 50-70% in cold season. According to the available statistical data, 62% of grasslands within these areas are suffering from water shortage.

Yili Valley and BoertalaPrefecture: Grassland quality within these areas is generally good. Spring and autumn pastures are dominated by semi-shrub desert grassland with good nutritional quality. Signs of degradation within these areas could be seen in 60- 70% of the grasslands, while only 10-20% show signs of severe degradation. Summer pastures are located in alpine and sub-alpine meadows, while winter pastures are usually located in the steppes and temperate desert grasslands. The major problems existed are

109 overgrazing and increase in number of weeds potentially caused by grassland degradation.

Tae Basin: The main grassland resources within this area are located in the westem part of Shayier Shan, Mayile Shan, Taerbahetai and Kulusitai. Grassland degradation within this area is rather serious, over 80% of grasslands show different degrees of degradation, while 33% are seriously degraded. The grass yield has dropped by 30-60% in comparison with data from the 1960's. Spring and autumn pastures show more severe signs of degradation. Winter pasture is mainly located in the mountains, while summer pastures are located in the middle and high mountain zones with good quality.

Southern Slopes of Tianshan Mountains: Bayinbruk grassland located in the high mountainous basin in the middle ridges of Tianshan Mountain range and is considered one of the four largest grasslands in China, expanding over 20,000 square kilometers. As with most other grassland regions within XUAR, as high as 80% of the grasslands within these areas show different degrees of degradation, while 33% of the area shows signs of serious degradation. Grass yields within the area have dropped by 30 to 60% compared to the data available from the 1960s Summer pasture is mainly located in high alpine grasslands on the southem slopes of Tianshan and in Bayingbruk grassland, and in Gongnaisigou alpine meadow grasslands. Spring and fall pastures are mainly located in the temperate deserts and on both banks of Tarim River system. Signs of severe grassland degradation are observed within these areas. Winter pastures are mainly distributed in the middle and lower mountain slopes (steppes) and on both banks of the Tarim River. Over 60% of the grasslands in the middle and upper reaches of the River show signs of degradation and degradation severity increases towards lower reaches of the river. Some areas have completely degraded and can't be used anymore. The main environmental concerns within these areas are overgrazing, especially within Bayingbruk grasslands where the area is used for year round grazing, causing severe overgrazing and grassland degradation. Desertification in the middle and lower reaches of mountain ranges in Kuche, Baicheng and Wensu counties is a major concern and the upper boundaries of desert is reaching areas as high as 2,500 masl.

The general environmental issues that are universal in all grassland areas are increase in weeds and poisonous grasses that could cause decrease in effective grass yield, overgrazing that appears to be an issue within the areas used for semi-pastoral livestock development, and animal numbers that appears to be over the carrying capacity, especially in winter pasture. Since the project does not promote any increase in the number of animals and also sponsor grassland improvement activities and development of artificial pastures, its implementation should improve the status of grasslands and their carrying capacity and reduce grassland degradation rate. However, to ensure the success of the project, it is imperative that the number of animals should not increase. Any increase in the number of animals, especially before improvement of degraded grasslands and increasing the natural grassland carrying capacity, could jeopardize the project success and would have detrimental environmental impacts.

110' Mitigation Measure: In order to ensure that the animal numbers will not increase during project implementation, it is necessary to strengthen the capability of the county level grassland monitoring stations (GMS) within the project counties 'to strictly enforce grassland laws and control the number and movement of animals in and between different grassland areas. The number of animals in the project areas should be kept at or below the grassland carrying capacity to prevent any further degradation of natural grasslands and to allow for their regeneration through implementation,of project proposed community based grassland improvement plans. Every effort should be made by the project proponents to include activities to prevent accelerated rate of desert encroachment through use of mechanical and agronomic desertification control measures and reduction of pressure on the grasslands located at the areas bordering the desert by increasing pen feeding and artificial pasture development within these areas.

B: Water resources and water quality

Impact Assessment: If project is implemented successfully, especially its grassland improvement component, presently degraded grassland should improve and the project should have a positive impact on both capacity of the grassland to retain surface runoff that should assist groundwater recharge. Grassland improvement should also reduce surface erosion that should eventually improve surface water quality due to improved surface cover and reduction in accelerated soil erosion. It is, therefore, believed that successful implementation of the project should bring about positive impacts on surface water quality and quantity of groundwater within the project areas.

Mitigation Measure: Since the perceived impacts are positive, no mitigation measures are required. However, in areas where the development of artificial pastures are suggested, especially in areas within the Tarim River Basin and areas within temperate deserts, water balance studies must be completed to ensure sustainable availability of surface and groundwater resources for implementation of artificial pasture development sub-component and make sure that more water efficient irrigation methods are used for the proposed artificial pastures.

C: Flora and Fauna and Natural reservation

Impact Assessment: The proposed project, if successfully implemented, should improve the quality of natural grasslands and increase the carrying capacity of the natural grasslands. If the numbers of domesticated animals are kept constant at present levels, the improvement of natural grasslands should allow the wild herbivores, native to the project area, to flourish that could potentially improve or at least protect the fauna biodiversity within the project area.

111 With regard to flora, reseeding of natural grasslands could change the grassland composition that can have-positive or negative impacts on flora biodiversity based on the type of seed chosen for reseeding of natural grasslands and/or if use of chemical fertilizers on natural grasslands is proposed.

Mitigation Measure: In order to ensure that the project will have no negative impact on the project wild animals community, fencing activities, especially within summer pastures should be commenced only in areas where no herbivore wild animals, incapable of jumping the fence, are present. Where such animals are present, arrangement should be made to either have areas that are not fenced for coexistence of wild and domesticated herbivores, or assign certain areas of the natural grasslands/water holes for use of the wild animals.

With regards to floral biodiversity, utmost effort should be made to only use native seeds for reseeding of the natural pastures. Use of exotic grass seeds should not be promoted by the project. It is proposed to consider mapping of the seed banks within project natural grasslands and develop grassland specific seed mixes for reseeding of the natural grasslands. This should not only prevent any reduction in floral biodiversity, but could also improve grassland nutritious capability and grassland biodiversity, if the well balanced natural seed mixes are collected.

Application of chemical fertilizers on natural grassland if not well planned, based on soil characterization and genuine need of the specific grassland area, could not only have significant negative impact on floral biodiversity, it could, in a long term, have a negative impact on grassland composition and floral biodiversity. It is imperative that grassland management component of the project should include soil characterization as a prerequisite for recommendation of any fertilizer application and/or type of fertilizer to be used, if any, within natural grasslands.

D: Soil Erosion

Impact Assessment: Soil erosion severity varies within the project counties. For example, soil erosion within summer pastures in Fuyun and Chabuchar counties appears to be slight to moderate, but the soil erosion levels in counties within Hecheng and Tekesi show severe sheet and gully erosion mainly due to grassland management practices.

Proposed improved grassland management practices, proposed by the grassland management component of the project, combined with enforcement of grassland laws with regards to livestock numbers should improve the grassland conditions with resulting reduction of surface runoff and accelerated soil erosion. However, a number of proposed grassland improvement activities might have negative impacts on soils and grasslands condition that could cause increase in magnitude of soil erosion within the natural grasslands. Fencing could have both negative and positive impacts on soil erosion status

112 of the grassland areas. If properly managed and used for such management activities as fencing the degraded pastures to alloy., for regeneration of grasslands, it should have positive Impacts on soil erosion status. However, the indiscriminant use of fencing, especially within summner pastures, could damage low "qualitygrasslands and aggravate soil erosion within such areas. Conversion of idle lands (previously converted farmlands) to artificial pastures, using perennial grasses should also help reduce soil erosion, by reducing surface runoff. The development of artificial grasslands should also reduce pressure on natural pastures by providing supplemental food resources.

Mitigation Measure: To prevent project induced soil erosion, the project should make every effort to only use fencing where it is appropriate and do not allow indischiminate use of fencing as a grassland improvement practice. Another major source of soil erosion within natural grasslands is overgrazing and extra pressure on this fragile natural resource. In order to prevent over grazing, it is proposed to enforce grassland laws with regard to grassland carrying capacity and monitoring of number of animals. As was stated before, GMS should be strengthening through training and capacity building to enforce the grassland laws and to monitor the condition and regeneration of natural grasslands during project implementation and operation.

E: Soil pollution

Impact Assessment: Soil pollution due to extensive grazing,of sheep and other small ruminants is not believed to be a significant issue in the semi-pastoral livestock development model since this model is mainly based on extensive movement of animals through large tracts of land and with the exception of winter months where animals might be pen fed, they are mostly roaming and no concentration of farmyard manure is anticipated.

The major project activities that might cause soil pollution include: rodent control, eradication of poisonous grass, pesticides for grasshopper control, and application of agrochemicals (fertilizers and pesticides) in natural grassland. The current pesticide application in project counties is shown in Table 7-8 while chemical fertilizer application in project counties is listed in Table 7-9.

Undisclosed herbicides are being used to eradicate poisonous grasses and to control grasshoppers, which might pollute soil and potentially water resources. In addition, undisclosed rodenticides are also used for rodent control within natural grasslands. According to the XUAR officials, rodent and grasshopper control in project areas is only carried out once every 5 and 10 years, respectively, and the poisonous grass control measures are still at trial stage. Since the type and quantity of herbicides and rodenticides used cannot be disclosed at this point, the prediction of potential impact is difficult to predict. However, the project is not promoting the use of pesticides, herbicides or rodenticides and should not cause any significant negative impacts. Whenever the data

113 on type and quantity of the above-mentioned agrochemicals used within the project area become available, the project should review their toxicity levels and if found extremely harmful to the envirownent (WHO's Category Ia), then the project should stop their use within the project areas.

Table 7-8 Pesticide Application in Project Areas in XUAR Pesticide WHO Application Amount (concentration) Category Natural Grassland Alfalfa Com 85% Trichlorfon II 1500 1000 1000 85% Dichlorvos lb 2000 2000 1500 500/o Carbary 11 500 300-500 400 400/o Dimethoate II 1500 300-500 400 500/o Malathion III 1500 1000 1000 72% 2,4-D Ester I 750-100 (mVhm2 ) 10% Glyphosate U 7500-11250 (g/lun') I

Table 7-9 Annual Fertilizer Application in Project areas in XUAR Crop name | Urea(N) Phosphorus Ammonia(P205) I Potassium sulphate(K2) | Kg/mu -Cotton 12-16 5-7 0.5-2 Cron 13-15 wheat 9-12 5-7 Sugar beet 23-25 10-13 Broomcom 7-8 1-2 Silage corn 12-15 2-5

Mitigation Measure: In general, the project does not have a significant impact on soils due to pollutants. Conversion of croplands to artificial pastures should reduce the use of agrochemicals within the converted areas by almost half that should have positive impacts on the soil and water resources of the project areas.

An attempt should be made by the county PMOs to reduce the use of pesticides to minimum to prevent only the economic injury to the plants, and efforts to eradicate the pests should be strongly discouraged by the project proponents. Maximum application of organic manure should be encouraged to reduce application of chemical fertilizers. Low toxic and low residue pesticides and herbicides should be identified to replace high toxicity agrochemicals. Large-scale rodent control campaign and eradication of poisonous grasses should first be approved by environmental agencies (such as environment monitoring station at the provincial and county level), and be carried out strictly following relevant regulations to minimize the potential impact of agrochemicals on the environment while protecting the health of livestock farmers and herders.

Such activities and promotion of environmentally sound pasture and fodder development should be included in the job description of extension officers and, if necessary, appropriate training on best management practices should be provided to the county extension officers and GMS officers.

F: Land use

114 Impact Assessmnent: The only project activity that could cause a change land use in the project areas is the development of irrigated artificial grasslands. The area of artificial grassland within semi-pastoral livestock development model is limited to some 30,000 ha in the winter pasture areas. Furthermore, artificial grasslands will be mainly developed by converting croplands or previously converted grasslands (idle croplands) and should not cause any significant impact on present land use in project areas. The envisaged development of fodder crops should not cause any irreversible or significant impact on present land use either.

The development of artificial grassland in the project areas will be based on the balance of stock and grass availability and should increase feed supply and reduce pressure on natural grasslands, allowing them to regenerate. Therefore, artificial grassland development should play a positive role in the improvement of natural grassland and ecological environmental quality of the project areas. Establishment of artificial grassland in previously converted agricultural lands is also in line with PRC government policy of "returning farmland to grassland" plan. Artificial grassland will usually be established in flat areas with irrigation facilities; so "restored grassland from farmland" should be used as much as possible. According to SEPA regulations, it is prohibited to damage or convert any original grassland or forest area to other forms of land use. Even irrigation of natural grassland could be considered a change of land use and should be cleared with SEPA.

Mitigation Measure: Since the proposed project does not appear to have any significant impact on the present land use, no mitigation measures are proposed. However, it has to be emphasized that the proposed project activities, especially the development of artificial pastures must not encroach on any "virgin" natural grassland. The project proponents should not consider the conversion of natural grasslands, even the ones perceived to be low yielding. Such activity is against the environmental laws of the PRC and the project should strictly enforce the laws by carefully reviewing the characteristics and present land use of the areas earmarked for conversion to artificial pasture. 7.5.2 Intensive (mainly pen-fed) Agriculture Based Livestock Development Model Project counties/breeding farm in XUAR that are using intensive (pen-fed) livestock production model include: Shache and Maigaiti of Kashgar Prefecture, Tulufan and Hami of Tulufan Basin. The feeding system in Kashgar is mainly based on pen feeding, while in Tulufan and Hami Basin it is mainly based on use of feedlots.

A: Water resources and water quality

Impact Assessment:

115 Artificial grassland and fodder development will use a relatively large volume of water, especially in the dryer and warmer areas with high evapotranspiration rates. The estimated total area of artificial grassland proposed for development within both extensive (semi-pastoral) and intensive livestock development county is rather large and amounts to some 30,565 ha (458,475 mu). According to the feasibility study report, the areas considered for conversion to arificial grassland are mainly presently farmed areas and no new natural pasture areas are considered for artificial grassland development.

Although many major river systems such as Yili River, Urumqi River, Emin River, Eeerqisi River, Aksu River, Boertala River and Yeerqiang River flow through these farming areas, due to intensive use of water resources (both surface and groundwater), care must be taken to ensure that water needs of downstream users and minimum river flow requirement are considered in the development of surface water utilization plans for this project. Based on discussions with local authorities, field visits, officials of XUAR water resources Bureau, and discussions with local farmers, the pressure on water resources has been increasing alarmingly in recent years, and groundwater table has fallen sharply in a number of project areas, especially within oasis areas in warm temperate desert ecoregion, and in the transitional areas between steppes and temperate deserts. The available data on water resources within the project areas, both water quality and quantity of the resources are scarce and no conclusive statement with regard to availability of water resources on a sustainable basis could be made at this point. In order to ensure sustainability of the proposed development project with regard to artificial pasture development and feed availability, it is proposed to include water balance studies as a prerequisite to the loan approval process at county level.

Mitigation Measures: In order to ensure availability of water resources within the intensive, pen-fed livestock development areas, all water resources data should be availed to the project feasibility teams to determine the final feasibility and sustainability of the proposed artificial pasture development sub-component. If data is not available (accessible), the feasibility team should collect original data and ensure that available water resources are adequate for the sustainable development of the project without having negative impacts on downstream water users. More efficient irrigation methods should be considered. Strengthening of the capabilities of the county agricultural extension officers on more efficient irrigation methods and dissemination of the information to livestock farmers involved in developing artificial pastures and fodder fields should be considered as potential component of the training and extension sub-components of the project. Use of other varieties of forage and fodder crops more suited to arid areas with lower irrigation water demand such as hybrid sorghum and drought resistant varieties of alfalfa (Medicago sativa and Medicagofalcata)varieties with lower water demand should be considered as alternatives to fodder corn and alfalfa. Research in many parts of the world had shown that alfalfa, especially at its latter stages of life and can deplete soil moisture to a depth of 4 to 5 m, and even 7 m if kept for 6 years. The average irrigation water requirement of alfalfa is about 450 to 550 mm per hectare under flooding from seeding to first cut, and is

116 300 to 350 mm, using sprinkler irrigation. Compared with sorghum, wheat, barley, oat, rapeseed, and com, the irrigation water requirement of 'alfalfa is much higher and this fact should be considered before finalizing the crop types to be planted as forage and fodder crops in the artificial pastures. The main mitigation measures to reduce the impact on depleting water resources, therefore, are use of drought resistance forage and fodder crop varieties, and use/promotion of more efficient irrigation systems through strengthening of agricultural extension departments, especially in water Ideficit counties. It is also proposed to include development of natural pastures in,grassland areas previously converted to agricultural land and since,been left idle and such areas on sloping hilly slopes to reduce animal feed pressure and potentially reduce the area of irrigated pasture, especially in areas with potential shortage of water resources for irrigation of artificial pastures.

B: Flora and Fauna and Nature Reserves

Impact Assessment: Although there are nature reserves in project counties (the list of nature reserves and animals and plants to be protected are provided in Chapter 4), the locations of artificial grassland and for other project activities are far from nature reserves buffer and core areas and no project impact is foreseen.

The intensive (pen-fed) livestock development model is mainly based on use of artificial pastures and fodder crops that are developed in previously cropped areas, cut and carry, and agricultural by-products. Therefore, there should not be any direct impact on natural grasslands and/or the native flora. The impact on the animals should also be negligible since no new area that is used by wild animals will be converted for forage/fodder production.

Mitigation Measures: Since no impact is foreseen, there will be no need for any mitigation measures. However, use of farmyard manure and leguminous plants such as alfalfa will improve soil fertility in the artificial pasture areas that should'assist the increase in soil fauna population.

C: Soil Resources

Impact Assessment: Since the feedstuff for the pen-fed livestock development model comes from agricultural by-products, fodder and forage crops, the project impact on soil resources is only originating from activities in connection with irrigation of artificial pastures. Proposed artificial pastures will cover some 10,000 ha of land that is presently used for crop production under irrigation. The conversion of croplands to irrigated pasture should reduce the application of fertilizers and pesticides by 40% and 50%, respectively that should improve environmental quality of the soils of the project areas. The current pesticide application in project counties is shown in Table 7-8while chemical fertilizer

117 applications in project counties is listed in Table 7-9.

Irrigation of artificial pastures, however, could have negative impact on soil resources, if proper soil and agronomic management practices are not followed. Indiscriminant irrigation of dryer, warmer areas, especially within Kashgar Prefecture could induce occurrence of secondary (irrigation induced) soil salinity and sodicity. If adequate drainage and leaching water requirement is not provided within areas with high evapotranspiration and/or heavy soils, the possibility of potentially having negative impact on soil resources increases.

Mitigation Measures: In order to reduce potential impact of agrochernicals on soil characteristics and water pollution, it is recommended to follow the best management practices for agrochemical application by reducing the chemical application rates to a level that prevent economic injury to the plants rather than trying to completely eradicate the crop pests that could not only harm other beneficial soil fauna, but also have negative impact on terrestrial fauna and humans. All attempts should also be made to identify alternative less toxic pesticides with a shorter half-life to reduce their negative, long-term impact. The best way to ensure that livestock farmers do follow the best agronomic and soil management practices is to strengthen the capacity of county agricultural extension officers, by providing them adequate training on the best irrigation, soil and agronomic management practices.

It is also proposed to review soil characteristics, especially within areas that show signs of salinity/sodicity such as Maigaiti ans Sache, and/or areas that have relatively high evapotranspiration rates. In such areas, soil and water quality should be analyzed to ensure that soil degradation due to change in cropping and irrigation pattern does not occur. It is important to remember that alfalfa is highly sensitive to soil salinity and fluctuating high water table, and its development within such areas could have significant negative impacts on soil and plant communities.

D: Land use

Impact Assessment: The only perceived impact of the project on land use is the conversion of some 10,000 ha of agricultural land to artificial pasture. Such a change does not impose any significant change in the general land use classification in the project areas.

Miiigation Measures: Since no significant impact on land use is envisaged, due to the development of the proposed project, no mitigation measures are proposed.

7.6 Analysis of Environmental Impacts & Proposed Mitigation

118 Measures for common environmental problems

In addition to environmental impacts identified above,ithere are a number of indirect project activities that are not specific to any of the livestock development models or project eco-regions. Such activities as feed processing, wool packing, and disposal of dead animals are considered common to all project areas and their impacts on the environment and proposed mitigation measures are discussed in this section. 7.6.1 Feed Processing Although the scale and size of feed processing operations in Gansu and XUAR are not determined yet, but they are believed to be on a small scale and mostly will be run by households or herders. Medium and large-scale dairy farm operations in Gansu do not have any farming operations to provide feed for their animals. Therefore all the feed had to be purchased from open market and some might need to be processed. However, the location and scale of such operations and their locations are not yet determined. Detailed work needs to be carried out before assessing the impacts and scope.

The major potential environmental impacts of such projects are noise and dust. The dust pollution of the feed processing mill can be divided into two types: point and non-point source. Since the scale of feed mills in the project areas is believed to be small, mainly mills set up by farmers (herders), there should not be any significant negative environmental impact. However, in residential areas measures should be adopted, such as putting the crushing machines indoors to reduce the environmental impacts to the nearby residents due to noise of the crutching machinery and dust. 7.6.2 Feedlots Feedlots generally produce significant quantities of farmyard manure (organic waste) that is very rich in nutrients such as nitrogen and phosphorus. Nitrogen is very mobile and could potentially pollute groundwater resources, if either the water table is close to the surface, or the soils of the area are highly permeable (sandy to sandy loam texture). Phosphorous, however, is not mobile and is mainly impact surface waters through sheet and rill erosion and surface runoff. Farmyard manure is a precious source of nutrients for agricultural crops and artificial pasture development. It not only provides nutrient to the crops, but will also improve soil conditions through improving its porosity (water holding capacity), soil structure, and organic matter content. Use of farmyard manure in farms should also reduce the use of chemical fertilizers. However, if manure management practices are not fully implemented, especially in breeding farms where large number of animals is kept I the feedlots, it could become a major point source of surface and groundwater resources.

Before plants can use nitrogen and other nutrients in manure, soil microbes must break them down into forns that are readily available to plants. This process is called "mineralization." Different types of waste will have different rates of decay. Manures can contain seeds from weeds that can prove difficult to control. Because heat generated

119 in manure stockpiles decreases the viability of weed seeds that may be present, the use of well-aged manures instead of freshly excreted materials will help reduce the likelihood of weed infestations from manure applications. Therefore, in order to allow the decay of farmyard manure and to prevent weed infestation of agricultural farms/artificial grassland, it is necessary to keep the manure in sedimentation ponds for a period of time before application to the agricultural fields or artificial pastures.

Choosing the size and location of sedimentation ponds, especially for medium and large- scale dairy farms, proposed in Gansu, should follow the following general rules:

Proximity to wells: Biosolids cannot be stored or applied closer than 300 m from a public or semipublic drinking water well and no closer than 100 m from any other water well.

Application site: Biosolids should be applied to soil with a pH of 6.5 or greater. The site should have a slope of less than 6% and be at least 10 m from surface water.

Depth to groundwater: This depends on the pathogen reduction class of the biosolids. The minimum depth to groundwater is 3 m; 10 in if soil is gravel or coarse to medium sand. 7.6.3 Wool Packing According to the discussions with the team members of the feasibility teams and discussions with the both PPMOs, wool packing will not involve wool washing, or scouring, and wool will be packed and sold as grease wool. Therefore, use of chemicals is not anticipated in the project and no wastewater from wool washing should be generated by the project. The only potential environmental impact of this activity are not significant and include minor increase in dust levels, and production of chopped wool during the process of sheering and packing. However, the operation the processes should be standardized and managed according to the principle of minimum impact to the environment. 7.6.4 Laboratory Chemical and Sewage Disposal The scales of the laboratories proposed in the project are very small and should not have any significant environmental impacts. However, to satisfy SEPA requirements, chemicals used in the laboratories should be stored properly by type and according to the management regulations for toxic materials. After use the chemicals should be properly handled and be sent to the designated disposal sites.

Analytical activities in the laboratories will mainly use diluted acids, alkali and other chemical solutions. The laboratory sewage should be disposed of according to SEPA's sewage disposal regulations. Untreated sewage of the laboratories will be discharged into the manure settling tanks and after meeting the discharge standard, can be discharged.

120 When the above-mentioned measures are taken, it will not cause significant negative impact to the environment. 7.6.5 Disposal of Dead Animals Dead animals in the project areas should either be sent to the local epidemic prevention station for disposal or be disposed in a centralized way under the leadership of the county PMO. This will prevent cross infectionl and environmental pollution. In remote areas, the usual disposal method is deep burial. Permeation should be prevented in burial location. In each layer of buried animals, lime should be applied for disinfections. On top of burial pit, a layer of waterproof materials should be used to prevent entrance of rainfall into the pit.

7.7 Environmental Risk Assessment

The purpose of this section of the report is to briefly review the major operational and natural risks that may impact the environment of the project area and the possible measures that should be adopted to mitigate against their occurrence or mriinimize their effects.

The project counties in Gansu and Xinjiang are located in a number of different ecosystems from high alpine to hot temperate desert and all ecosystems in between with some ecologically highly sensitive areas. The livestock production models vary within the project counties depending on their ecological conditions and availability of adequate grazing land. As was stated in Chapter 4, intensive livestock production, using pen feeding is the most prominent livestock production system in Gansu and the drier, agricultural counties of XUAR. The environmental risk greatly varies for areas using pen feeding as the modality than the areas using extensive grazing (semi-pastoral) production system. In agricultural areas (pen feeding production system) the artificial pastures can only be established on strip of appropriate soils provided that sufficient water resources of adequate quality are made available. If the water supply cannot be guaranteed, appropriate land is not available for production of adequate forage and fodder crop, or the irrigation system stops working due to unpredicted events or insufficient management, the fodder and forage crops and windbreak belts will be severely impacted and may even perished. Considering the slow establishment and very long reproduction cycle of the primary sand fixation vegetation in oases areas close to sandy or Gobi desert (Maigaiti, Shache, Hami, Tulufan City in XUAR and Jiuquan City, Yongchang, Liang Zhou City, and Zhangye City in Gansu), any abandoned land could, be desertified very rapidly and may suffer irreversible deterioration that could lead to the failure (desertification) of other adjacent areas through the uncontrolled movement of Aeolian sand. Therefore, when the artificial pastures and silage corn (fodder) fields are established, to ensure the sustainability of the project it is important to make sure that it continues to operate as a complete unit and that its major irrigation components continue to operate fully.

121 In areas with either low quality water (Salinity class higher that Class S2, having EC*10- 3>4 mSm-') and/or high evapotranspiration such as Jiuquan City, it is imperative to closely monitor water and soil quality to prevent the development of saline and sodic soils. During field visits by the EA team to Jiuquan City, many areas with irrigation- induced salinity/sodicity were observed. It is imperative that utmost care should be taken by the project proponents through use of efficient irrigation practices and provision of drainage and leaching requirements in their irrigation design of artificial pasture and fodder production fields to prevent any increase in the areal extent of saline/sodic fields.

In areas majority of areas that are using extensive grazing (semi-pastoral) production system, the water resources appear to be adequate and no risk due to water use is envisaged. However, it is necessary to use more efficient irrigation methods to prevent future water resource problems and to ensure sustainable, long-term development of livestock and agricultural production systems. The main envisaged environmental risks within extensive grazing areas could be caused through: 1) Degradation of natural grasslands; 2) Inadequacy of winter feed, especially during drought years; and 3) When long winter season (snow emergency conditions) prevails in the project areas.

One of the project objectives is to improve the status of natural grasslands and if the project is successfully implemented, this problem should not occur. However, in any project there are certain elements that, if not identified and strictly monitored, could cause unforeseen problems. It is, therefore, necessary to discuss such risk elements and identify methods for preventing their occurrence within project area.

The main risk identified with relation to grassland degradation is control of number of livestock that graze on natural grasslands to below grasslands carrying capacity. The PRC grassland laws have clearly identified the necessity of limiting the number of animals to below grassland carrying capacity. Although the proposed IPDP project is not recommending to increase animal numbers and aims at improving the quality of natural grassland, increasing the area of artificial pastures and improving the breed quality, the risk of increase in the number of animals is real and project should include risk management plans to ensure the enforcement of grassland laws through strengthening of the county and township grassland monitoring stations (GMS) and building up their capacity through training and providing more implementation power to such institution. If adequate training and enforcement power is provided to the GMS, the environmental risk of increase in animal numbers is not believed to be significant.

More details of the major risks and other more specific environmental risks are summarized in Table 7-10.

122 Table 7-10 Assessment Risks to Project Operation Risk Element Effects Probability of Avoidance or Mitigation Responsible Institute Occurrence Measures Extended Reduce forage, 1. Severe drought 1. Rational utilization of Meteorological Drought fodder and occurs once every water resources. Bureaus; Provincial agricultural 20 years. 2. Making better job of & Regional Institutes production, impact 2. Higher meteorological of Animal natural grassland probability of for forecasting. Husbandry and quality. smaller, short-term 3. Breeding and Agricultural drought. dissemination of drought Sciences, PPMOs. resistant forage and fodder crops. Climatic Affect the output of Minor in most 1. Making better job of PPMOs. Provincial Disasters agriculture, counties in Gansu meteorological and County Animal (Hail, Frost, artificial and and Southern forecasting. Husbandry Bureaus. Snow) natural pastures XUAR, greater 2. Using and forestry. potential in recommendations of snow Northern XUAR emergency Plans. and probably 1. Using warning system Sunan County, using NOAA forecasting. Gansu. Overgrazing Degradation of Moderate to high, I. Strictly enforce PRC County and natural grasslands. should reduce Grassland laws with Township GMS, through improved respect to animal numbers PPMOs. grassland and carrying capacity. management and 2. Strengthen the livestock number township and county control. GMS. Soil Affect agricultural, Moderate to high in 1. Rational utilization of Provincial & County salinization fodder, drier agricultural irrigation water. Water Conservancy and/or productivity, areas (pen-fed 2. Control of groundwater Bureaus, Agricultural sodification reduce quality of system) with level by way of well Universities, grassland and its moderate to highly irrigation and drainage. PPMOs. composition (more saline water 3. Monitor soil and water halophytes) and resources, low in chemistry regularly. salinize the soil. extensive grazing 4. Train farmer in water areas. use and signs of soil salinity/sodicity. Desertification Loss of Moderate to high in I. Rational use of Provincial & County agricultural/fodder counties adjacent irrigation water. Water Conservancy land, reduction in to deserts, low in 2. Rational selection of Bureaus, Provincial feed supply. extended grazing artificial (irrigated) & County EPBs. areas. grasslands. Irrigation Insufficient Slight to moderate 1. Regular examination of Provincial & County System irrigation water, in areas assigned irrigation canal systems Water Conservancy Breakdown crop, fodder forage for irrigated and other irrigation Bureaus, PPMOs failure, potential pasture/fodder infrastructures. site abandonment. development. 2. Planned and budgeted annual maintenance of irrigation infrastructure.

123 8 Environmental Management Plan

The experiences on EIA around the world has shown that even if mitigation and monitoring plans proposed in the EIA are clearly described, the mitigation and monitoring plans may be ignored without effective and competent monitoring and enforcement procedures to supervise and ensure the implementation. Therefore, it is recommended that project proponent develop an enforceable plan, the Environmental Management Plan (EMP), prior to commencement of the project activities as part of the overall project management operation. The EMP identifies the responsibilities of each organization involved in the implementation of EMP and the proposed mitigation and monitoring activities during design, construction/implementation, and operation. For projects where International Finance Agencies (IFAs) participate in project funding, the Loan Agreement guarantees that the monies needed for establishing and operating the EMP would be made available as an integral part of the project budget (not as a kind of "add on").

In the early 1990s, the structure of the EIA report was modified to include a separate chapter on Environmental Management Plan (EMP). The EMP developed in the project EIA includes all mitigation and monitoring requirements specified in the EIA. As soon as the feasibility study of the project including EIA is approved, an implementing institution should be established as a part of the overall PMO structure and should be responsible for implementation of project mitigation and monitoring activities.

The project's influence on environment will occur during the construction/implementation and operation periods. In Chapter 7, all the issues affecting the environment were identified and analyzed. Corresponding mitigation measures were proposed. In this chapter the environmental monitoring plan and the corresponding responsibility are identified. This orderly identification, assessment, and presentation of mitigation measures ensures that no important issues are overlooked and that negative impacts are prevented or reduced to minimum.

The project involves many environmental issues, however, the impact of the project to local environment can be effectively controlled if the following major environmental issues are monitored and controlled.

8.1 Implementation Organizations and Responsibilities

As indicated in Fig.2-1 of Chapter 2, in China, project environmental management within each concerned ministry and commission is organized and carried out by their respective environmental protection department under the supervision of SEPA and local EPBs.

The Ministry of Agriculture (MOA), one of the concemed ministries, is one of the organizations that have responsibilities for protection and management of environment

124 within the areas of influence of the project. The institution that has direct responsibility is the Ecological Enviromnent Division of the Department of Sciencei Technology and Education of the Ministry of Agriculture. Its main responsibilities are: (1) to ensure that the project adhere with the relevant environmental protection laws, regulations and standard of China, and (2) to supervise environment protection in the agricultural sector of the country. SEPA provides supervision and monitoring to the work of MOA. Other organizations such as the Livestock Bureaus and Animal Husbandry Bureaus in Gansu and XUAR have similar departments and personnel for environmental protection who are also responsible for supervision and monitoring of the project impact under the overall supervision of the relevant EPBs.

Both Gansu and XUAR have provincial environment monitoring stations (EMS) responsible for monitoring the environmental impact of various development activities within their respective jurisdictional boundaries, and for compiling the annual environmental quality reports. The responsibility of these organizations include: (1) reporting to SEPA any changes in the quality of natural environment, (2) environmental pollution control; (3) progress achieved in environmental protection; and (4) handling application for discharge of important pollution source. Environment monitoring stations at city and county levels are responsible for monitoring changes of environmental quality of atmosphere, water, noise and natural environment and for reporting to the provincial environmental monitoring station.

However, the EPB and the environmental monitoring station (EMS) staffs are not responsible for daily inspection and monitoring of the environmental perfornance of the project. Therefore, the respective PPMO should provide necessary organization and manpower to ensure effective and smooth implementation of the environmental requirements of the project. The following chapter discusses the details of implementing institutions and the proposed environmenital management plan (EMP), its manpower and institutional requirements.

8.1.1 Implementation Organizations At project feasibility study level, the EIA prepared by the project proponents has to be reviewed and approved by SEPA and the! WB safeguard group. At this stage, SEPA also solicits comments and opinions of XUAR and Gansu EPBs.

However, during project implementation/construction and operation phases of the project, implementation of the environment management plan is the responsibly of the respective PMOs. XUAR and Gansu EPBs should be requested to collect the required data, monitoring of the implementation of the EMP and checking whether the mitigation measures of each subcomponent of the project are successfully undertaken. The respective county EPBs should be requested by the respective PMOs to supervise and inspect subcomponents of the project with potential environmental impact following the proposed EMP and the relevant environmrent protection laws of China.

125 The project areas will include 17 counties/farm in Gansu Province and 35 counties/farms in XUAR. In order to ensure smooth implementation of the project with minimum negative impact on environment, the following EMP is formulated and must be followed by the project proponents in its entirety. The EMP must be considered as a part and parcel of the project and must be budgeted as a project item in the financial feasibility report and the project implementation plan.

In order to ensure successful implementation of the proposed EMP and in line with relevant national environmental regulations, each PMO should appoint an officer, on a full or part-time basis, who will have full responsibility for the successful implementation of the activities defined in mitigation and monitoring sections of the EIA report (Chapter 7) during each phase of the project implementation and at least the first five years of project implementation. The county PMOs (CPMOs) should also designate one of their staff to be trained by the project to take the responsibility of ensuring the adoption of all EMP activities by the project at the county/farm level. He/she should convey the environmental issues within the project to the project implementation agencies of the PPMO and the county EPBs, responsible for data collection and providing technical assistance to the environmental officer. The environmental officers identified at PMOs at every level (county, prefecture, province/region) are responsible for the preparation of the environment protection materials and documents related to project implementation for the review of SEPA, the World Bank and respective EPBs at various levels During operation phase, each CPMO will assist the PPMO with implementing the environmental monitoring program and other work included in the environmental management plan. However, the ultimate responsibility for ensuring that all activities identified in the EMP are implemented rest on shoulders of the respective PMOs and they must ensure smooth flow of required environmental reports/data from the counties to the provincial/regional office. The environmental management and organizations during implementation and operation phases are diagrammed in Fig.8-1 and Fig. 8-2, respectively.

126 PLG

PPMO

|Environmental Officer (PPMO) |

Fesgn Uni County PMOs designated | Local govemmental institution |enviromnmental Supervisors | including EMS, EPBs, Forestr Bureaus, GMS, etc.

Fig. 8-1 Environmental Management Organization during Construction Stage

PPMO

[ PPMOs, CPMOs (I person, each)

Local govemmental institutions including EMS, GMS, Provincial and County EPBs, ettc.

Fig. 8-2 Environmental Management Organization during Operation Stage

127 8.1.2 Role of PMO and Environmental Monitors As was discussed in 8.2.1, implementers of EMP will be the responsibility of PMOs at various levels. They are responsible for ensuring the smooth implementation of the mitigation measures and the monitoring plan as is detailed in the environmental assessment report. Their major tasks include: a. Review and implementation of mitigation and monitoring activities with comments on the activities as needed to obtain minimum acceptable environmental performance level in the overall project; b. Regularly check implementation of pollution control measures in project sub- components that might have pollution problems such as dairy cattle development sub-component and large feedlots. Report those facilities that are not operating properly or are discharging above SEPA's environmental standard discharge regulation and report such violations to local EPBs; c. Recommending, gaining approval for and carrying out any special studies, which are believed necessary for reaching the minimum acceptable environmental performance; d. In close cooperation with the project design and implementation teams, make sure that the relevant mitigation measures contained in the EMP are reflected in the final project plans and that necessary conditions for project monitoring are in place; e. Provision of necessary training of staff of project management offices and implementers of project subcomponent on environmental issues and environmental inspection to improve the institutional capacity of county and township personnel in implementation of EMP activities; f. Supervise the implementation of the environmental protection measures as specified in the environmental mitigation plan; g. Provide written guidelines whenever gaps in environmental performance are found and to take corrective measures; h. Perform emergency response plans during environmental emergency conditions and report any environmental accident/mishaps to the PPMO and local EPBs in a timely manner; i. Implement the environmental monitoring plan including engaging and supervising monitoring institutions and ensure that all sampling activities as defined in the monitoring plan is completed on a timely manner; j. Implement the environmental monitoring plan including engaging and supervising monitoring institutions and ensure that all sampling activities as defined in the monitoring plan is completed on a timely manner; k. Prepare periodic reports on environmental performance of the project's implementation and operation to be availed to relevant environmental administrative departments/Bureaus and the World Bank; 1. Deal with the complaints concerning the environmental aspects and accept the supervision of the environmental protection departments; m Arrange for the visits of the Bank Mission staff, if necessary and regulatory staff of EPB or EMS;

128 n. Supervise environmental issues during project implementation/construction and urge construction/implementation teams to follow relevant regulations; and o. Be responsible for other actions needed for implementing the EMP. 8.1.3 Supervision Organization Under the guidance of SEPA, XUAR and Gansu EPBs are the administrative departments for environmental protection. They are responsible for the environmental management and supervision within the jurisdiction of the respectivel region and province. The local EPBs at prefecture, and county levels are the administrative departments of the corresponding local governments environmental protection under respective regional and provincial governments and are responsible for the environmental management and supervision within the jurisdiction of the local government. They will be responsible for environmental monitoring and supervision of project sub-components within their respective local government jurisdiction. EPBs and EMS offices at provincial, prefecture, and county levels should cooperate closely with clearly defined responsibilities and accomplish monitoring work of the project. Under the jurisdiction of each Provincial/regional EPB, a Provincial/regional Central Environmental Monitoring- Station is established that is responsible for the monitoring of environmental quality within the jurisdiction of the province/region. The Prefecture/county level environmental monitoring stations (EMS) established under prefecture/county EPBs are responsible for the environmental monitoring within the jurisdiction of prefectures. The environmental protection work of this project will be carried out under-the supervision of SEPA, provincial/regional EPBs and local EPBs within the project areas. The environmental supervision plan is summarized in Table 8-1. 8.1.4 Environmental Management Plan In order to ensure the effective implementation of the proposed environmental mitigation measures for the project, an environment management plan has been formulated and listed in Table 8-2.

129 Table 8-1 Environment Monitoring Plan, IPDP, China Stage Organization Monitoring items Monitoring Objectives Feasibility Study 1. Review EIA 1. Guarantee a complete environmental assessment, and appropriate subject 2. Review EMP draft identification, emphasize the key points. 2. Make sure it reflects the possible, significant potential problems which might be produced by this project 3.Guarantee a concrete practicable action plan of mitigation measures Design & Gansu EPB, 1. Review the preliminary 1. Strictly execute EMP Implementation XUAR EPB, design for environmental 2. Ensure that all national environmental laws and regulations with regards to SEPA, WB protection and EMP project construction/implementation are considered. SEPA, WB 2. Check whether 3. Secure that sufficient environmental protection investment is in place investment for environment protection is in place. Gansu EPB, 3. Check selection of project 4. Check whether there are sufficient water resources in the project areas for the XUAR EPB areas. development of artificial pastures, dairy farms, feedlots, breeding farms. 5. Ensure that the project areas are far away from the nature reserves buffer and core areas, and make sure that the project will not block the migration route of wild animals. 4. Supervise dust and noise 6. Take recommended measures in EMP to dust and noise pollution. pollution, if found to be an 7. Ensure that construction teams follow EMP, and relevant state and local laws issue. and regulations. 8. If noise is found as an environmental nuisance, enforce proposed construction times according to EMP. 5. Inspect whether there are 9. Protect cultural relics underground cultural relics. 6. Inspect the discharge and 10. Ensure that solid waste and raw sewage are disposed according to relevant treatment of daily sewage national and local regulations. Ensure that surface and groundwater are not and waste from larger contaminated. construction site such as

.______dairy farms

130 Stage Organization Monitoring items Monitoring Objectives 7. Check whether 11. Ensure erosion control measures according to EMP, national and local laws construction will cause are in place. accelerated soil erosion. Operation Gansu EPB, .Inspect the implementation 1.Protect the environment; minimize the environmental impact during operation XUAR EPB, of EMP-in operation stage phase. Local EPBs, 2.Check the implementation 2. If necessary, review and amend the EMP to overcome unforeseen impacts. GMS of monitoring plan 3. Guarantee the sewage disposal meet the standard. 3. Verify whether it is 4. Ensure that project impact on natural resources are minimized, especially on necessary to take further natural grasslands and water resources. environmental protection 5. Make sure national laws and regulations with regards to animal numbers is measures for unforeseen enforced. environmental problem. 4.- Ensure that grassland management/improvement measures are implemented. 5. Ensure that number of animals is not increased above carrying capacity.

131 Stage Organization Monitoring items Monitoring Objectives Gansu EPB,. 1. Check whether the 6. Enforce the national regulations with regards to discharge of pollutants, XUAR EPB, discharge of pollutants especially sewage discharge of dairy farms and runoff from large feedlots. Local EPBs meets the national 7. Ensure that project will not cause any additional degradation of natural standards. grassland. Report any wrong doing to appropriate regulatory agencies. 2. Check if project is 8. Ensure that project will not cause negative impact on water resources and their causing unforeseen pressure availability for downstream users. Report any wrong doings to the appropriate on natural grassland, and the regulatory agencies. water balance in the region. 9. Prevent any potential project impact on nature reserves, rare flora and fauna by 3. Check whether the enforcing the EMP. project has any impact on 10. Supervise and check agricultural chemicals used in rodent control, nature reserves, rare flora or grasshopper/locust control, and eradication of poisonous grasses in natural fauna. grassland, ensure that no Category I pesticide is used and other pesticides will not 4. Check if project is cause pollution of surface and groundwater resources. causing accelerated soil erosion. 5. Review the use of agricultural chemicals in project areas.

132

Table 8-2 Environm ent Management Plan for IPDP, China Environmental Mitigation Policies and Control Measures Issues Jm mnter Agency A. Design Phase 1. Optimize project design and plan to minimize its potential negative environmental impacts. 2. Project subcomponents should be planned and designed to avoid environmental sensitive areas like core and buffer zones of nature reserves and wildlife habitats, to avoid natural and cultural relics, and to reasonably arrange construction schedule to minimize land occupancy and reduce land occupancy time. 3. Review and ensure that there is a balance between livestock number and feed in the project areas. Make certain through monitoring that project's grassland management plans ensure that this project will not put additional pressure on natural grassland, and worsen degradation of natural grassland. 4. Review water balance studies in the project areas where irrigation water are used for Gansu PPMO I.The Project artificial pasture development through coordinate with water resource management XUAR PPMO, Gansu PPMO, agencies.Deintas XAPM 5. Ensure that there will not be any significant impact on water resources of the region, the Design teams minimum flow requirements, and the water requirements of downstream users. Promote the adaptation of more efficient irrigation systems in the project areas. 6. Formulate appropriate feeding models, strengthen management on grazing. In semi- pastoral areas, the number of livestock should be determined by grass availability. Ensure that the number of animals do not increase above the available feed in natural grasslands (grassland carrying capacity). 7. Strengthen GMS to enforce monitoring and regulating the number of animals within natural grasslands due to implementation of this project. 7. Ensure that the migration routes of wild animals and their feed sources will not be blocked by fencing, especially in the summer pastures, and ensure adequate feed supply for

134 Environmental Mitigation Policies and Control Measures Implementer Responsible __ _ Issues ______Agency wild animals. 8. Respective PPMOs should provide the project plans for such project subcomponents that are close to nature reserves and/or habitats of wild animals for approval of relevant departments. 10. Prepare a separate EA report for development of the dairy subcomponent of the project in Gansu. 1. If construction of limited access roads is required, they should be designed to minimize land occupancy and avoid/minimize damage to vegetation. 2. Land Use 2. Construction of wool packing, feed plant and laboratories should use as little land as Design Units Gansu PPMO, possible. XUAR PPMO 3. Artificial grassland development should not claim any new, natural grassland or forest area. 1. Review all agrochemicals that are proposed for use in the project areas and prevent use 3. Agricultural of any pesticide in WHO Category la that might be proposed for use. Altematives should County Chemricals be selected to replace the highly poisonous pesticides. Promote the use of low residue Agricultural Gansu PPMO, agrochemicals (pesticides, insecticides, herbicides, rodenticides, and solutions used for Extension XUAR PPMO disinfections). 4. Number 1. Project county GMS monitors variation of the numbers of sheep grazing on natural Variation of Sheep pasture and selection of migration route within the project areas. Provincial and Gansu PPMO, Stock in the county GMS XUAR PPMO Project Areas 1. Organize relevant agencies to undertake water balance studies in the project areas. County, Provincial, and 5. Water Resource regional Water Gansu PPMO, Utilization Resources XUAR PPMO Bureaus or Stations

135 Environmental Mitigation.mpementer Policies and ControlMeasuresI Responsible Issues I n oto Maue Iatomlmne IoceAgency B. Implementation / construction phase 1. Construction machineries should be kept far away from nature reserves and wildlife habitats. If construction activities are located in proximity of buffer areas, effort should be made to reduce noise as low as possible 1. Nature reserves 2. It is not allowed by national laws to convert forest or natural grasslands to any other use Gansu PPMO, and wildlife including artificial grasslands. Artificial grassland development should be implemented in Construction XUAR PPMO, habitats presnt agricultural land or previously converted agricultural land with irrigation facilities. Team County PMOs 3. Proper disposal of wastes resulted from construction activities. Waste disposal sites should be located far from nature reserves and wildlife habitats. 4. Construction workers should be directed not to enter core and buffer areas of nature reserves. Hunting and damage to wild plants should be strictly prohibited. 1. After the canal construction is finished, on such canals that the canals is designed in fill material, vegetation planting should be arranged to cover the exposed side slope. To get the best effect, the side slope plantation should be completed one month in advance to the rainy season. 2. Avoid digging irrigation ditches on mountain slopes greater than 250 or on sloping land during rainy season. Sand bags, hay bales or straw matt should be used on the down slope side of any cut areas to reduce soil erosion and increase in sediment load of the water Gansu PPMO, 2. Soil Erosion bodies. Construction XUA PPMO, 3. After completion of construction work or development of artificial pastures, vegetative Teams Ganty PMOs cover should be planted as soon as possible to prevent wind and water erosion, as well as County PMOs runoff. 4. The construction of large-scale dairy farm in Gansu should employ restrict soil erosion control measures during construction to prevent soil erosion and increased sediment load in nearby river/water bodies. As much as possible, the excavated material should be used in construction and any surplus should be disposed off properly according to national and provincial environmental pollution laws.

136 Environmental Mitigation Policies and Control Measures Implementer Responsible 5. The waste earth and stone chips produced during construction activities at dairy farms, feedlots or irrigation infrastructure rehabilitation activities, if cannot be used in construction, should be piled in designated areas and be removed to dump sites. If no assigned dumpsites are available they could be compacted layer-by-layer and protected by surrounding retaining walls, and then be timely covered with vegetation. 1. If there are residential areas within 300m of the construction site, construction activities are forbidden at 22:00 to 6:00 at night, 12:00 to 14:00 in daytime. In XUAR, the schedule should be postponed by two hours to reflect the local environmental conditions. 2. The access roads should be selected away from such sensitive locations as schools, residences and hospitals. If they are within 50 meters of sensitive areas, transportation should be banned during night hours. 3. When the construction site is close to school, no construction work with heavy noise 3. Noise machines should be arranged at school time; when the construction site is close to densely Teams County PMO populated residences, construction work with machinery that produce high noise levcels should not be arranged at nighttime. In case that the above construction work has to be -proceeded, consultation must be-made-with-the residents who may be impacted, or proper compensation must be paid. To reduce the noise pollution of construction machineries, mobile noise isolation can be used. 4. The construction operator's work time should be arranged in accordance with the labor hygiene standard, and personal protection measures such as wearing earplugs and helmets, etc. should be provided to the operators. 1. Mixing equipment should be placed at least 300 meters from residential areas, hospitals and schools. Sealing, vibration reducing and dust absorbing measures should be adopted. 2. Construction 4. Air quality According to national labor laws, labor protection measures should be provided to the Team, County County PMO operators of the construction machineries, such as protective glasses and masks. PMO 3. Water should be sprayed during dry, dusty days on the construction sites and related PMO roads to prevent dust.

137 Environmental .. Responsible Issues Mitigation Policies and Control Measures Implementer Agency 4. Large-scale dairy farms in Gansu should be located at least 1,000 meters away from environmentally sensitive areas such as residential areas. 1. Inform contractors and construction workers on recognition of cultural relics and County 5. Natural and importance of protecting them. Cultural Relics Gansu PPMO, cultural relics 2. During construction, if cultural relics are found, construction should stop, the Bureau GaRPPMO construction supervisor should protect the site, and concerned department should be County PMO XUAR PPMO immediately notified to handle the find. 6. Minority Construction Gansu PPMO, Nationalities 1. Respect the living style and traditional customs of minority nationalities. Team XUAR PPMO C. Operation phase 1. Ensure that the project formulated grassland management plans are followed and the numbers of sheep are kept below the grassland carrying capacity to ensure sustainable use of grasslands. 2. Enhance the capability of county grassland stations that are responsible for supervision County, 1. Grassland and enforcement of grassland laws. Provincial and Gansu PPMO, Resources 3. In line with the principle of balancing grass and livestock, artificial grassland and other regional GMS XUAR PPMO feed sources should be developed to reduce pressure on natural grasslands. 4. Ensure that project financed fencing activities will not produce any impediment for non- domesticated animals that also require utilizing the same natural resources. The fencing activities should not block 1. For those project areas where water resource is scarce, study on water balance should be conducted, water use quote for the project should be coordinated with water resources Gansu PPMO management department. and 2. Water resources 2. Adopt advanced water saving irrigation technologies as sprinkler irrigation, reduce County PMO EPB,XUAR impact to the water flow of the lower reaches and surrounding areas. PPMO, and 3. For artificial grassland to be planted with alfalfa, it should be considered to plant some EPB grasses that need less water, such as sorghum, barley and oat.

138 Environmental Mitigtion Policies and Control Measures Implementer Responsible Issues Agency 4. Artificial grassland development should use agricultural land as abandoned and slope land to reduce the pressure on irrigated grassland. 1. Project finance fencing, as much as possible, should be restricted to winter pasture. Prior to finalization of the fencing plan, respective environment protection agencies that are responsible for wildlife and nature reserves (forestry bureaus, EPBs) should be consulted and their approval should be obtained. 3. Flora, fauna, and 2. If there are wild animals in the project areas, either no fencing should be allowed in Gansu PPMO naturresrves those areas shared by both domestic and wild animals, or an area of adequate size should County PMUAnd EPPM, nature reserves be allocated for the use of wild animals. XUAR PPMO, 3. Local wild grass species should be selected for supplementary sowing in natural and EPB grassland; the grassland stations of the project areas must supervise the selection of seeds and supplementary sowing methods.- - 4. No chemical fertilizer is allowed on natural grassland, only organic manure can be used. 1. Supervise and enforce grassland carrying capacity to prevent overgrazing. County GMS Gansu PPMO, 4. Soil Erosion 2. Flat agricultural land should be selected to develop artificial grassland, to prevent and EMS XUAR PPMO aggravated soil erosion caused by irrigation of sloping land. _ __ndEM_UA _PM L PMOs and agricultural extension stations should formulate appropriate pest management plans to improve efficiency of agro-chemical application and to minimize negative, long- term impacts of pesticides on natural environment. 2. Select pesticides and herbicides with short-term residual effect and low toxicity Local PMOs, 3. Improve watershed management and agricultural practices based on research conducted Local EPBs, 5. Use of by the national and local institutions and include them in the extension programs, Agricultural Gansu PPMO agrochemicals especially in grassland management and artificial pasture development. extension XUAR PPMO 3. Promote timely and well-balanced application of farmyard manure and chemical Stations fertilizers. 4. Prior to pesticide application for large-scale rodent control, it must be approved by the province/county EPB, and strictly follow relevant regulations. In no circumstances any category la pesticides, as defined by WHO, should be used within the project areas.

139 Environmental Mitigation Policies and Control Measures Implementer Responsible

Issues ______Agency 1. Artificial grassland development should not claim any new land. Only previously converted agricultural land should be used for development of artificial pastures. G 6. Land use change According to the national laws and decrees, no natural grasslands or forestland can be County PMO Gansu PPMO, converted for any other use including development of artificial grasslands.

1. The manure and other waste, developed by dairy fanms operation (Gansu), and large 7. Solid and liquid feedlots (Gansu, XUAR) should be disposed off properly. Solid and liquid waste should be sewage of large treated, and detailed manure management plans must be formulated to ensure that surface County PMO Gansu PPMO, dairy farms and and groundwater will not be polluted. XUAR PPMO feedlots 2. Sewage of the dairy farm in Gansu must be treated and satisfy the national standards for Idischarge. D. Environment Monitoring 1. Monitoring the ecological environment of grassland: status of grassland degradation, Gansu/XUAR I. Natural status and rate of desertification, ecological environment quality change and trend analysis. GMS, Gansu PPMO, grassland 2. Disaster monitoring and disaster relief forecast for grassland-based livestock industry. agricultural XUARPPMO Monitoring trends in pest and diseases within natural and artificial grasslands. extension, and 3. Monitoring annual fluctuation of grassland productivity. EMS. Pre-implementation phase (baseline data collection): a. Monitoring items: pH, total P, total N, N03-N, NH3-N, COD, BOD5, fecal and total coliforms, and suspended solids 2. Surface Water b. Monitoring frequency: once Local EMS Gansu PPMO, c. Monitoring periods: 1-2 days. XUARPPMO d. Location to be monitored: medium and large-scale dairy farms, large-scale feedlots and any other areas deemed necessary upstream and downstream of potential non-point pollution sources by the environmental protection agencies.

140 Environmental Mitigation Policies and Control Measures Implementer Responsible Issues______Agency Implementation/operation phase: a. Monitoring items: pH, total P, total N, N03-N, NH3-N, COD, BOD5, fecal and total coliforms, and suspended solids. b. Monitoring frequency: Once every year during the implementation period of each sub- project, followed by once every year for 5 years during operation). c. Monitoring periods: 1-2 days. d. Location to be monitored: medium and large-scale dairy farms, large-scale feedlots and any other areas deemed necessary by the environmental protection agencies upstream and downstream of potential non-point pollution sources, and based on observable pollution indicators (eutrophication, foul smell, etc.). Pre-implementation phase (baseline data collection): Monitoring items: pH, total P, total N, N03-N, NH4-N, COD, BOD5, fecal-and total coliforms. b. Monitoring frequency: once Local EMS Gansu PPMO, c. Monitoring periods: I day XUARPPMO d. Location to be monitored: Wells with 100 m diameter of medium and large-scale dairy farms, large-scale feedlots and areas deemed necessary by the environmental protection agencies. 3. Groundwater Implementation/operation phase: Monitoring items: pH, total P, total N, N03-N, NH4-N, COD, BOD5, fecal and total coliforms. b. Monitoring frequency: Once every year during the implementation period-of each sub- project, followed by once every year for 5 years during operation. c. Monitoring periods: I day d. Location to be monitored: Wells with 100 m diameter of medium and large-scale dairy farms, large-scale feedlots and areas deemed necessary by the environmental protection agencies.

141 8.2 Environmental Monitoring Plan, Gansu The main purpose of this section is to summarize the needs of monitoring and to prepare a sound environmental monitoring program. The main objectives of the plan are (1) to ensure that all the mitigation measures specified in the EIA will actually be carried out; (2) to evaluate the monitoring data to determine whether the environmental protection measures as proposed (including design, implementation, and operational procedures) are actually furnishing adequate environmental protections and if not, to indicate the correction measures that is needed, and (3) to ensure sustainable use of natural resources (such as water, grassland and soil) by the project. 8.2.1 Monitoring Items The monitoring program includes monitoring for each of the individual environmental issues as identified in Chapter 7. 8.2.2 Monitoring Implementer The implementer of the monitoring plan is Gansu PPMO and PMOs in counties. According to the jurisdictional zoning, respective PMOs at various levels will undertake their monitoring responsibilities. The Prefecture, City or county EMS will cany out monitoring the quality of surface and groundwater, while Gansu Provincial GMS will undertake monitoring over grassland ecology and related issues. Gansu PPMO should reach a contractual agreement with respective monitoring stations before project implementation. The county environmental officers are responsible for requesting for monitoring activities by the respective monitoring stations, according to the requirement of EMP and whenever the situation arises. 8.2.3 Monitoring Report System The reporting system for environment monitoring is shown in Figure 8-1. After completion of each environmental monitoring task, the prefecture environment monitoring station should submit the monitoring report to the PPMO and to the higher administrative department of environmental protection. During implementation/construction, and the first five years of operation phases, Gansu provincial PMO should submit annual environmental quality report to the World Bank. All submitted reports should also be available to Gansu EPB and to SEPA, upon their request. 8.2.4 Pre-implementation Monitoring (Baseline data) The pre-implementation/construction monitoring program is designed to achieve two main objectives. The first one is to check whether the mitigation measures contained in the environment assessment report have been incorporated in the final design document and in the construction contracts. The second is to assess the existing conditions, including seasonal variability of the various parameters. The proposed monitoring plan for each component is as outlined in Figure 8-3. The monitoring items and related issues can be found in table 8-2. GansuPrefecture/ount EMSA

Fig. 8-3 Monitoring Report Chart, Gansu

8.2.5 Monitoring during implementation/construction The monitoring of implementation programs is designed to evaluate the construction activities and to ensure that they meet the established criteria. The construction of project, especially construction/rehabilitation of irrigation infrastructure for artificial pastures, construction of medium and large-scale dairy farms, and to a lesser extent development of larger feedlots/breeding farm facilities and warm sheds. The construction of the project could bring about some potentially adverse impacts on environmental parameters including air quality, vegetation, soil erosion, acoustic environment, public health, biological resources, etc.

Air Quality: Dust control methods implemented to reduce construction generated dust levels will be spot checked throughout the construction period to evaluate their effectiveness and provide the basis for additional measures (as required). Table 8-3 presents air quality monitoring program for the project areas, if found necessary.

Table 8-3 Construction AirOuality Monitoring Program Monitoring Site Item Frequency Sampling Timing |Implementer Construction sites TSP Twice a Once in the The PPMO is responsible for the where large year, I to 2 morning and once implementation of this program, residential area days in the afternoon. and will entrust the corresponding within 10Om. municipal environmental monitoring stations to undertake the monitoring tasks, as needed.

Noise: The construction noise-monitoring program is designed (see Table 8-4) to monitor the impact of construction noise on the near residents. For noise-producing construction activities far away (more than 200 m) from residential areas, this monitoring is unnecessary.

Table 84 Noise Monitoring Program During Construction

143 Site Monitored Frequency Monitoring |Monitonng Implementer

Environmentally-sensitive sites At random, Once/day, CPMO/ EMS within 200 m of construction site if required Once/ night

Soil Erosion and Surface Water Sediment Loading: Soil erosion could occur at construction sites, along areas of cut and fill such as irrigation canals and during construction of medium and large-scale dairy farm activities around water conveyance means (weirs, rivers, waterways, etc.). Such erosion could cause increase in river sediment load that could negatively impact aquatic flora and fauna. Respective CPMOs will be responsible to identify areas that could cause such impacts and should direct the contractor to provide adequate soil conservation measures along the slope such as hay- bale, silt fence and/or fiber mats to prevent increase in the sediment load of rivers and lakes within the project area. 8.2.6 Monitoring during Operation The environmental impacts during project operation phase will be mainly the potential pollution to surface and groundwater by sewage discharge from dairy farms, and the impacts to natural grassland resulted from improper use of resources such as overgrazing. The main parameters that should be monitored include surface and groundwater quality especially where dairy farms or large feedlots are established groundwater draw down where groundwater or consumptive use of surface and groundwater is used for irrigation of artificial pastures, number of grazing animals, and grassland degradation status. More detailed and relevant information on environment monitoring parameters, implementing agencies and responsible institutions are presented in Table 8-2. 8.2.7 Monitoring Budget An estimated budget for the implementation of the monitoring programs for Gansu is listed in Table 8-5. The cost of baseline surveys during pre-implementation monitoring is estimated at 40,00OYuans (Rmb), 90,000 Rmb during implementation phase and 100,OOOY during operation phase. The total cost of environmental monitoring is estimated as 230,000 Rmb. This budget does not include the cost of reviewing the project implementation plan document during pre-implementation phase.

144 Table 8-5 Cost Estimation of Environment Monitoring of Gansu Province Monitoring Phase Monitoring Contents Cost, Yuan

Pre- Surface Water quality (only on major rivers within project 26,000 Implementation influence) (once) Groundwater Quality within areas with signs of groundwater 14,000 shortage Quality of natural grassland and variation of grazing capacity 20,000* Sub-total 60,000 Implementation Surface Water quality (only on major rivers within project 52,000 period influence) Groundwater quality (only within project areas with signs of 28,000 water deficiency) Air and Acoustic Enviromnent (if needed) 10,000 Sub-total 90,000 Operation (once Quality of surface water 130,000 every year for 5 Quality of groundwater 70,000 years after Quality of natural grassland and variation of grazing capacity 40,000* completion of Sub-total 240,000 implementation phase of each sub- project:. Total 390.000 * Should be collected from GMSI

8.3 Environmental Monitoring Plan, XUAR The main purpose of this section is to summarize the needs of monitoring and to prepare a sound environmental monitoring program. The main objectives of the EMP for the IPDP in XUAR are (1) to ensure that all the mitigation measures specified in the ETA will actually be carried out; (2) to evaluate the monitoring data to determine whether the environmental protection measures as proposed (including design, implementation, and operational procedures) are actually fumishing adequate environmental protections and if not, to indicate the correction measures that is needed, and (3) to ensure sustainable use of natural resources (such as water, grassland and soil) by the project. 8.3.1 Monitoring Items The monitoring program includes monitoring for each of the individual environmental issues as identified in Chapter 7. 8.3.2 Monitoring Implementer The implementer of the monitoring plan is XUAR PMO and county PMOPs. According to the jurisdictional zoning, respective PMOs at various levels will undertake their monitoring responsibilities. The Prefecture, City or county EMS will carry out monitoring the quality of surface and groundwater, while XUAR Provincial GMS will undertake monitoring over grassland ecology and related issues. XUAR PPMO should reach a contractual agreement with respective monitoring stations before project implementation. The county environmental officers are responsible for requesting for monitoring activities by the respective monitoring stations, according to the requirement of EMP and whenever the situation arises.

145 8.3.3 Monitoring Report System The reporting system for environment monitoring is shown in Figure 8-4. After completion of each environmental monitoring task, the prefecture environment monitoring station should submit the monitoring report to the PPMO and to the higher administrative department of environmental protection. During implementation/construction, and the first five years of operation phases, XUAR provincial PMO should submit annual environmental quality report to the World Bank. All submitted reports should also be available to XUAR EPB and to SEPA, upon their request. 8.3.4 Pre-implementation Monitoring (Baseline data) The pre-implementation/construction monitoring program is designed to achieve two main objectives. The first one is to check whether the mitigation measures contained in the environment assessment report have been incorporated in the final design document and in the construction contracts. The second is to assess the existing conditions, including seasonal variability of the various parameters. The proposed monitoring plan for each component is as outlined in Figure 8-3. The monitoring items and related issues can be found in table 8-2.

146 I Gas EP PM v

|Local EPB | L

Prefecture/County EMS

Fig. 8-4 Monitoring Report Chart, XUAR

8.3.5 Monitoring during implementation/construction The monitoring of implementation programs is designed to evaluate the construction activities and to ensure that they meet the established criteria. The construction of project, especially construction/rehabilitation of irrigation infrastructure for artificial pastures, and to a lesser extent development of larger feedlots/breeding farm facilities and warm sheds. The construction of the project could bring about some potentially adverse impacts on environmental parameters including air quality, vegetation, soil erosion, acoustic environment, public health, biological resources, etc.

Air Quality: Dust control methods implemented to reduce construction generated dust levels will be spot checked throughout the construction period to evaluate their effectiveness and provide the basis for additional measures (as required). Table 8-6 presents air quality monitoring program for the project areas.

Table 8-6 Construction Air Quality Monitoring Program Monitoring Site Item Frequency Sampling Timing Implementer Construction sites TSP Once/each Once in the morning The PPMO is responsible for where large residential quarter, I- and once in the the implementation of this area within 100m. 2days afternoon. program, and will entrust the corresponding municipal environmental monitoring stations to undertake the monitoring tasks, as needed.

Noise: The construction noise-monitoring program is designed (see Table 8-7) to monitor the impact of construction noise on the near residents. For noise-producing construction activities far away (more than 200 m) from residential areas, this monitoring is unnecessary.

Table 8-7 Noise Monitoring Program Du rng Construction Site Monitored Frequency Monitoring Monitoring Implementer period timing Environmentally-sensitive sites Once/day, within 200 m of construction At random 1-day Once/ night CPMO/ EMS site ______14.

14, Soil Erosion and Surface Water Sediment Loading: Soil erosion could occur at construction sites, along areas of cut and fill such as irrigation canals and during construction of medium and large-scale dairy farm activities around water conveyance means (weirs, rivers, waterways, etc.). Such erosion could cause increase in river sediment load that could negatively impact aquatic flora and fauna. Respective CPMOs will be responsible to identify areas that could cause such impacts and should direct the contractor to provide adequate soil conservation measures along the slope such as hay- bale, silt fence and/or fiber mats to prevent increase in the sediment load of rivers and lakes within the project area.

8.3.6 Monitoring during Operation The environmental impacts during project operation phase will be mainly the potential pollution to surface and groundwater by large feedlots and breeding farms/laboratories sewage discharge and surface runoff, and the impacts to natural grassland resulted from improper use of resources such as overgrazing. The main parameters that should be monitored include surface and groundwater quality especially where large feedlots and/or breeding farms are established. In addition, groundwater draw down where groundwater or consumptive use of surface and groundwater is used for irrigation of artificial pastures, number of grazing animals, and grassland degradation status should be monitored. More detailed and relevant information on environment monitoring parameters, implementing agencies and responsible institutions are presented in Table 8-2. 8.3.7 Monitoring Budget An estimated budget for the implementation of the monitoring programs for XUAR is listed in Table 8-8. The cost of baseline surveys during pre-implementation monitoring is estimated at 50,OOOY (RMB), 155,OOOY during implementation phase and 170,OOOY during operation phase. The total cost of environmental monitoring is estimated as 375,000 Y. This budget does not include the cost of reviewing the project implementation plan document during pre-implementation phase.

Table 8-8 Cost Estimation of Environment Monitoring of XUAR

148 Monitoring Phase Monitoring Contents Cost, Yuan Pre- Surface Water quality (only on major rivers within project 24,000 Implementation influence) (once) Groundwater Quality within areas withsigns of groundwater 20,000 shortage Quality of natural grassland and variation of grazing capacity 20,000* Sub-total 64,000 Implementation Surface Water quality (only on major rivers within project 48,000 influence) I Groundwater quality (only within project areas with signs of 40,000 water deficiency) Air and Acoustic Environment (if needed) 8,000 Sub-total 96,000 Operation (once Quality of surface water 120,000 every year for 5 Quality of groundwater 100,000 years after Quality of natural grassland and variation of grazing capacity 100,000* completion of Sub-total 320,000 implementation phase of each sub-

project) .______Total 480,000 * Should be collected from GMSI 8.4 Environmental Training/Institutional Strengthening Plan

8.4.1 Training Objectives

The objectives of the environmental training program is to enable provincial and county PMO officials responsible for implementation of EMP to further strengthen their capabilities and to enable them to ensure successful implementation of the mitigation and monitoring plans specified in ELA during final project design, implementation and operation of the project. The trainees could also include environmental officers from Hovill Dairy Company in Gansu and the state and breeding farms in both Gansu and XUAR, but the respective groups should adsorb the transportation, food and lodging costs.

In order to ensure the success of the intensive training 'courses and the implementation of EMP, it is required that the employees who will be assigned as the environmental officers should have university degrees from accredited universities in one of the relevant natural resource areas (grassland management,' water resources, agronomy, etc.) and should have a minimum of five and three years of experience for the PPMO and county PMO environmental officers, respectively.

8.4.2 Training Courses, Gansu

The following courses will be included in the environmental training pogrom in both Gansu and XUAR: Understanding and applying of laws, regulations, standards and norms of the Chinese govemment conceming environmental protection; Environmental management criteria utilized by the World Bank; Environmental technology and environmental monitoring techniques including: (1) status of surface waters, principles of hydrogeology, and groundwater distribution; (2) basic knowledge of environmental monitoring; (3) basic understanding of identifying degree of grassland degradation and different types of grasslands; (4) Pollution control

149 technologies; (5) basics of water sampling and sample treatment for analysis of different elements identified in EMP; and (6) preparation of reports on environmental monitoring.

The officers of provincial EPBs will provide training on these subjects in Lanzhou, being assisted by the scientist of the Grassland Management Institute, Animal Husbandry Bureau and the . In order to reduce the training cost, XUAR and Gansu PMOs have the option and could decide to arrange for combined training courses for the senior environmental staffs of respective PMOs, State and breeding farms and Hovill Dairy Company, using the capabilities of both XUAR and Gansu universities and scientific institutions. If the second option (combined option) is selected, the training program will somewhat modified and take the "training of the trainers" format. 8.4.3 Training Courses, XUAR The main training requirements of XUAR are almost the same as Gansu. The major differences are the variety of eoregions in XUAR due to sheer larger area of the region and more emphasis on semi-pastoral livestock development model in XUAR compared with Gansu. 8.5 Budgets, Gansu Table 8-5 presents cost estimates for implementation of EMP in Gansu at Y 230,000. Table 8-9 presents estimated budget for salaries of part time environmental protection staff of PMOs at various levels in Gansu, which is 711,000 RMB (Y). Table 8-10 presents estimated budget of Y 89,800 for the environmental training program for Gansu. Table 8-11 presents the overall environmental management cost estimate for Gansu amounting to Y1,133,880. If the incremental salary costs of the PMO employees are not included in the total cost, the actual additional EMP cost is Y 351,780.

Table 8-9 Salary Cost of Environment Protection Staff Of PMOs, Gansu Preparation Implementation Operation Personnel (6 years) (5 years) Total Total Cost Total Total Cost Total Total Cost m/m Yuan m/m Yuan m/m Yuan PPMO 3. 7,500 24 60,000 15 37,500 County PMOs 324* 351,000 170* 255,000 Sub total 7,500 411,000 292,500 Grand total 711,000 Notes: 1. This an opportunity cost. The employee is fully employed by the respective PMOs for other technical activities and will be assigned to EM? for 25% of his/her time per year during implementation and 17% (2 months per year) for monitoring periods. 2. Estimated cost of PPMO officer is 2,500 Yuans per month and county PMO officer is 1,500 Yuans per month.

Table 8-10 Cost for Environment Training in Gansu

150 Training Plan No. of Training Cntents Ti Daily Total Personnel cost cost 1. Classroom training Days Yuan Yuan 1.1 Trainers 4 As per Environmental 6 600 14,400 1.2 PMO Personnel 18 Training Program 6 300 32,400 1.3 Facilities & management .___._=_10,000 Subtotal _ 56,800 2. Field/practical training 2.1 Trainer 2 Field Trips 5 600 6,000 2.2 PMO Personnel 18 5 300 27,000 Subtotal l 33,000 Total 89,800

Table8-11 Total cost estimation for Environment Management Plan of Gansu Item Reference Pr aon Implementation ation | Subtotal* .______Y uan Incremental staff cost Table 8-9 7,500* 411,000* 292,500* 711,000* Training Table 8-10 89,800 . 89,800 EMP Table 8-5 60,000 90,000 240,000 390,000 Sub-Total 157,300 501,000 532,500 1,190,800 Contingency, 10% 15,730 50.100 53,250 119,080 Total 173,030 551.100 585,750 1.309,880 * The figures presented are the assumed salaries of full-time employees (opportunity cost) of respective PMOs for the period that. they should work on environmental issues, and not an additional cost to the respective PMO. The actual cost of EMP, with 10% contingency is Y 527,800. 8.6 Budgets, XUAR Table 8-8 presents cost estimates for implementation of EMP in XUAR at Y 375,000. Table 8-12 presents estimated budget for salaries of part time environmental protection staff of PMOs at various levels in XUAR, which is Y 1,449,000. Table 8-13 presents estimated budge of Y 139,300 for the environmental training program for XUAR. Table 8-14 presents the overall environmental management cost estimate for XUAR amounting to Y 2,159,630. If the incremental salary costs of the PM0 employees are not included in the total cost, the actual additional EMP cost is Y 625,790.

Table 8-12 Sal ary Cost of Environment Protection Staff Of PMOs, XUAR Preparation Implementation Operation (6 vears) (5 years) Personnel Total Total Cost Total Total Cost Total Total Cost m/m Yuan m/mr Yuan m/m Yuan XUAR PMO 3 7,500 24 60,000 15 37,500 County PMOs 576 | 864,000 320 480,000 Sub total 7,500 924,000 517,500 Grand total 1,449,000 Notes: 1. This an opportunity cost. The employee is.fully employed by the respective PMOs for other technical activities and will be assigned to EMP for 25% of his/her time per year during implementation and 17% (2 months per year) for monitoring periods. 2. Estimated cost of PPMO officer is 2,5,00 Yuans per month and county PMO officer is 1,500 Yuans per month.

151 Table 8-13 Cost for Environment Trainina in XUAR Training Plan No. of Training Cbntents Time Daily Total cost Personnel cost 1. Classroom training As per Day Yuan Yuan 1.1 Trainers 4 Environmental 6 600 14,400 1.2 PMO Personnel 33 TriigPorm6 300 59,400 1.3 Facilities & management Program ITrainng 10,000 Subtotal 83,800 2. Field/practical training 2.1 Trainer 2 Field Trips 5 600 6,000 2.2 PMO Personnel 33 5 300 49,500 Subtotal 1 55,500 Total 139,300

Table8-14 Total cost estimation for Environment Management Plan of XUAR Item Reference Preparaion Implementation Operation Subtotal* Yuan Incremental staff cost Table 8-12 7,500* 924,000* 517,500* 1,449,000* Training Table 8-13 139,300 139,300 EMP Table 8-8 64,000 96,000 320,000 480,000 Sub-Total . 2,068,300 Contingency, 10% 206,830 Total 2,275,130 * The figures presented are the assumed salaries of full-time employees (opportunity cost) of respective PMOs for the period that they should work on environmental issues, and not an additional cost to the respective PMO. The actual cost of EMP, with 10% contingency is Y 681,230.

152 9 Conclusions and Recommendations 9.1 Major Conclusions The environmental and social analysis of the Integrated Pastoral Development Project indicated that while the project would have no major direct negative impact on the natural environment, its overall social and environmental impact would be positive. The project, if successfully implemented, should improve natural grassland conditions within the project counties, should increase food supply for livestock, and should increase farmers income and livestock production, not by increasing the number of animals, but through breed improvement and improved marketing systems. iHence, the economic and social well being of the farmers of the project areas should improve in the forms of available, reliable, and fair market system for sale of higher quality livestock produce such as mutton sheep and fine-wool. The proposed project, in general, will have a positive impact on the socio-economic conditions of the farming communities by improving their livelihood through increased purchasing power. 9.1.1 Selection of Project Areas Project areas in Gansu include 14 counties (cities) in nine prefectures, one corporation and two farms managed by Gansu Provincial Agriculture and Animal Husbandry Bureau. The development of fine wool sheep will dominate Sunan and Huangcheng. Development of mutton sheep will be the main project activity in other project counties. Dingxi, Jiuquan, Lintan, and Lintao Counties and Hovill Dairy Company will also focus on dairy cattle and milk production.

Project areas in XUAR include 32 counties in eight prefectures, and 3 sheep breeding farms in Gongnaisi, Tacheng and Bazhou. 9.1.2 Environmental Impact Analysis and Mitigation Measures The potential environmental impacts of the project during implementation/construction phase of the project in both Gansu and XUAR are temporal and limited in magnitude. There are, however, a number of unavoidable aspects of project implementation, which, if not well handled, may have potential adverse impacts on both natural environment and social environment in some localities. The magnitude of such impacts will depend on the success of and the manner in which proposed project specific environmental mitigation plans and programs are implemented. The temporary negative impacts of theses impacts are believed to be minor and include potential vegetation damage during rehabilitation of irrigation infrastructure for the development of artificial pastures and due to temporary land occupation at the construction sites, minor soil erosion and corresponding increase in sediment load during construction, and minor potential noise, air, and water pollution. However, if the mitigation measures proposed in the Report are successfully implemented, the degree of environmental impacts during this phase of the project will bc insignificant.

During operational phase, potential environmental issues that are identified in the report include: (1) potential impact on water resources (surface and groundwater), (2) potential soil pollution through application of agrochemicals for control of poisonous grass, rodents, and grasshoppers, (3) potential cumulative impact of large dairy farms and large feedlots on both soil and water resources (eutrophication, increase in COD, coliforms, etc.), and (4) potential impact on plant biodiversity of natural grasslands in project areas,

153 if chemical fertilizer application to natural grasslands practice is adopted by the project proponents.

Regarding each possible adverse impact, corresponding mitigation measure is proposed for the purpose of preventing or reducing it to insignificant levels. The use of better watershed management and best management practices based on the latest findings of research and extension component of the project should guide herders, livestock farmers, and large dairy farms and feedlot managers in use of rational and environmentally balanced methods to reduce point and non-point source pollution within the project areas. Since the project schemes are scattered and involve a large area of Gansu and XUAR, effective implementation of the proposed mitigation measures would be a challenge to the project proponent. In order to cope with the complex environmental issues, an environmental management plan (EMP) including institutional strengthening, environmental training and environmental monitoring plan is developed. The EMP should be strictly implemented to ensure that the proposed project would have neither significant nor irreversible adverse impact on the natural environment of the project area. 9.2 Recommendations In order to prevent potential negative impacts of the proposed project and to improve the likelihood of having a successful project, it is suggested to adopt a dynamic approach to the environmental monitoring and management by further incorporating measures to include additional measures to reassess the EMP if unforeseen environmental impacts are identified during project development and operation phases. 9.2.1 Follow-up Program A follow-up program is recommended to analyze the overall impacts of the project implementation and operation. Such program will be served to verify that predictions of impact put forward in the planning stages are as expected, and if not, adequate and timely corrective measures would be developed and implemented. Hence, corrective measures can be undertaken before irrevocable impacts have occurred. Information gathered from these programs is also used as input to refine future design.

The proposed program should incorporate the monitoring plan as presented in Chapter 9.

A number of interim reports should be prepared by the PPMO environmental officers of both Gansu and XUAR, as outlined below, to ensure that findings of the EMP are incorporated in the project design of future sub-projects and a dynamic approach to EMP is followed by the project; (I) An interim report at the end of the pre-construction program, to provide input to the implementation phase; (2) Interims annual reports on the completion of implementation and construction activities; (3) Annual interim reports during the monitoring of project operation; and (4) A final report, summarizing impacts and successes of rnitigation measures.

If significant unforeseen negative impact is discerned at any stage, the schedule will allow for a re-evaluation of the situation and provide sufficient time to implement further measures. Reports should be submitted to senior PPMO management, the World Bank, and various regional lined agencies, if requested, for review and comments. 9.2.2 Public Participation The community and public involvement process was initiated during the environmental and socio-economic surveys when herders, livestock farmers and village conmmunities

154 were contacted to obtain baseline informnation. It is imperative that these processes should continue so that the project participants feel that they are involved in the project and that their views and concems are being adequately considered in the project planning process. In order for the beneficiaries to participate in the project design more actively, it was suggested to develop detailed beneficial participation plans for the projects and have been prepared by the PPMOs in Gansu and XUAR. These plans detail participating activities in each stage of project implementation and participants including herders, livestock farmers, breeding stations, large county operated farms, government organizations, NGOs and particularly the disadvantaged groups including women and minority nationalities in the project area. Since no specific sites and dates of participating activities are specified in these plans, it is suggested that the PPMOs develop a concrete schedule based on the prepared plan to guarantee a smooth implementation of the plan during project implementation.

In general, the majority of livestock farmers and herders support the implementation of the project. In addition, all the cadres at grassroots units, staff of the provincial and city project offices, staff of the livestock bureaus at provincial, city and county levels and officers of the Ministry of Agriculture who were interviewed strongly support the implementation of the project. 9.2.3 Further Suggestions and Environmental Requirements Project beneficiaries should strictly follow the grassland management plans and county grassland management stations should effectively supervise the implementation of the grassland management plans to control/prevent overgrazing. Grazing of natural grasslands should follow grassland laws and animal numbers should be controlled based on nutritional carrying capacity of available grasslands to protect the condition of natural grasslands and promote sustainable development of livestock industry.

Prior to selection of project location, detailed water balance studies must be carried out, to ensure that the incremental water use will not damage water balance of the project areas, and project development and consumptive water use will not cause any significant negative impact to downstream water users and minimum flow requirements is observed.

Prior to finalization of the dairy sub-component in Gansu, individual environmental -assessment of large and medium size dairy farms should be completed to determine whether the location of the dairy farms are environmentally acceptable, and whether proposed corresponding pollution control measures are adequate for the size of the proposed operations. In the individual feasibility and design reports of these projects, the sizing and type of sewerage (mainly milk residues and washing water) treatment facilities and details and sizing of manure management facilities (settling ponds, manure storage areas, etc.) must be presented before final environmental approval of such plans could be granted.

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10 List of References (1) The Technical Guidelines for Environmental Impact Assessment (HJ/I2. 1-2.3-93, HJ/T2.4-1995, HJ/T19-1997), SEPA (2) The World Bank Operational Policy 4.01, 4.04, 4.09, 4.11, 4.37; (3) Research on Guidelinesand Methodology and Standards of Environmental Assessment for Agriculture Development, 2000. 12, SEPA. (4) Research Report on EIA Methodology for Agriculture Development, 2000. 12, SEPA. (5) Framework of Technique Guidelines for Agriculture Development, 2000. 12, SEPA. (6) EIA Guidelines for Agriculture Development, 2000. 12, SEPA. .(7) Research on methodology of water resource development, China Environmental Technology Aid Project (C-2-5) funded by World Bank, 1997.7 (8) Environmental Standrads in China, 2001, SEPA. (9) Research Report of Investigation on ecological status in western China, 2001.7, CRAES (10) Atlas of Remote Sensing Investigation on Eco-environment in Western China, 2002.2, SEPA and State Bereau of Surveying and Mapping (11) Report of Remote Sensing Investigation on Eco-environment in Western China, 2001.6, CRAES and General Station of Environmental Monitoring. (12) Gansu Vegitation, Gansu Science Publication House, 1997. (13) Grass Planting Zoning in Gansu, Gansu Animal Husbandry Bureau, 1991 (14) FS report on Grassland Construction and Managernent in Gansu, Gansu PMO, 2002.2 (15) Grassland Resource in Gansu, Gansu Science Publication House, 1996. (16) Environemetal Quality Report of Gansu, 2001, Gansu EPB. (17) Water Resource Report of Gansu, 2001, Gansu Water Resource Bureau (18) Wild Anirmal in desert, 2000.12, Continental Media Publication House. (19) Natural reservation in Xinjiang, Ministry of Forestry, 1984. (20) Soil in Xinjiang, Xinjiang Agriculture Bureau and Soil General Survey Office, 1996. (21) Grassland Resources in Xinjiang and their utilities, Xinjiang Animal Husbandry, Sanitation Publication House, 1993. (22) Survey on land use in Xinjiang, Xinjiang Agriculture Bureau, 1993 (23) Pastoral Water Resource Planning in Xinjiang, Xinjiang Water Resource Bureau, 1993. (24) Nature reserves in Xinjiang, Wild Animal Pretection Association and Flora Pretection Office of Xinjiang, 1999. (25) Environmental Quality Report of Xinjiang, Xinjiang EPB, 2001. (26) Statitics Book of Xinjiang in 2001. (27) Statitics Book of Gansu in 2001. (28) The Treatment and Reutilization of Wastes in Ecological Agriculture. Bian Yousheng, Chemical Industry Publication House, 2000. (29) Pesticide and Ecological Environmental Pretection, Lin Yusuo etc. Chemical Industry Publication House, 1999. (30) Investigation on Agriculture Resource in Gansu, 1993. (31) Assessment on Current Status of Water Resource Development and Utilization in Xinjiang, National Key research Project, 1999. (32) Assessment on Water Resource in Xinjiang, National Key research Project, 1999.

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